When it comes to the business community, the White House may feel like an abused partner in a bad marriage. President Obama likely believes that he keeps giving business what it wants yet gets nothing but complaints and unemployed Americans in return.
His gift giving began with the stimulus package, full of goodies for the preferred businesses. It continued with the auto bailout, payroll tax holidays, accelerated depreciation, “cash for clunkers,” first-time homebuyers credit, and even the extension of the Bush tax cuts.
In fact, Obama even created an Economic Advisory Recovery Board chaired by GE’s Jeff Immelt whose purpose is to report to the White House on ways to improve the economy. The board was created in 2009, nearly three years ago.
The president speaks passionately about entrepreneurs and innovation all the time. He continually addresses the need for economic-friendly policies, like more spectrum for wireless broadband. On the surface, the relationship between major business leaders and the White House seems quite cozy and comfortable.
Yet, the economy continues to stagnate and unemployment remains above nine percent. Adding salt to the wound, business owners and executives, including many former Obama supporters, seem likely to support the Republican candidate next November.
Indeed, more and more business leaders are speaking out against the president. The dam broke in mid-2010 when then-Business Roundtable Chairman and Verizon CEO Ivan Seidenberg said that the Obama administration was creating “an increasingly hostile environment for investment and job creation.”
Earlier this year, Steve Wynn, the billionaire head of Wynn Resorts and a Democrat, said that “the business community in this country is frightened to death of the weird political philosophy of the President of the United States.”
Now public criticism is common. Just this month a poll in Chief Executive magazine concluded that 85 percent of CEOs rank Obama’s performance as “weak” or “poor,” with one CEO saying, “The current administration is so anti-business, we don’t plan on any expansion until we have a new president. We just hope we’ll be around to see that day.”
Why the disconnect?
Business is not just big companies. Smaller companies dominate America. Entrepreneurs create almost all the new jobs. As I recount in my book, “The Comeback: How Innovation Will Restore the American Dream,” a 2010 Kauffman Foundation study found that “without startups, there would be no net job growth in the U.S. economy.”
Yet small businesses have gotten little access or attention in this White House. The White House appears oblivious to the psychological impact of GE heading the committee that advises the president on how to create jobs. GE is so big and reliant on government contracts that its problems and challenges are not shared by most American businesses.
Moreover, the federal government is hurting business and job creation as it increases the regulatory burden.
Making a payroll means dealing with new taxes, health care mandates and the cost of new regulations. To compensate for the added burden, businesses must hire scores of accountants and lawyers to decipher and follow all the new rules. Washington has shifted from occasionally helpful to downright destructive of business interests.
Anti-business actions, proposals and rhetoric make it worse. Frequent talk of “spreading the wealth around,” “corporate greed” and new tax proposals all discourage investment and job creation.
Closing Boeing’s new South Carolina factory, raiding Gibson Guitars for violating an ambiguous law in another country, and changing unionization rules to allow sudden union formation all force companies to invest and hire overseas. Encouraging hostility to business by embracing the Occupy Wall Street protesters only makes matters worse.
Results must match rhetoric. President Obama excited the business community when he promised to double exports in five years. Yet it took almost three years to simply get three Bush-era trade deals signed and no other deals have been made to promote exports and trade.
Nothing has been done on repatriation of corporate profits, lowering our absurdly high corporate taxes or shifting our educational system to train Americans for the 3.4 million jobs that are open. While college-educated, liberal arts majors protest in American cities, jobs for engineers, technicians and skilled machine operators go unfilled.
President Obama and his advisors have scant business, managerial or leadership experience. The president has relied on personality and oratory and the Democrats in Congress to lead. He created a Deficit Reduction Commission and ignored its bipartisan recommendations, which led directly to a Congressional stalemate over our debt ceiling. Obama also blew off Rep. Paul Ryan’s good faith effort to address skyrocketing Medicare costs and tried to make it an election issue.
It might be a big mystery to the president and his advisers why business spurns their advances. But it isn’t a mystery to anyone in business. Businesses are not hiring and this anti-business government is at least partially responsible.
Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, “The Comeback: How Innovation Will Restore the American Dream.”
- GE CEO sours on Obama despite green energy subsidies (junkscience.com)
- White House Turns Over 432 Pages of Documents in Solyndra Case (blippitt.com)
By JOSHUA SEGALL
The question looming in everyone’s mind is, “Where are the jobs?” The answer to this question appears to be China. Last week, President Barack Obama’s jobs czar, CEO and Chairman of General Electric, Jeffrey Immelt, announced that he was launching a joint venture between GE and China. This partnership will send medical and aviation manufacturing jobs to China, rather than keep them here in the United States. This further adds to the poor choices Obama and his administration have made when “attempting” to reduce the unemployment rate.
When Obama took office in 2008, he ran on the idea of change. With an economy in the slums and a global recession on the brink, Obama was voted in to transform the way the United States operates. Shortly after he was elected, he went on the record to state that “we need to act with the urgency this moment demands to save or create at least 2.5 million jobs so that the nearly 2 million Americans who’ve lost them know that they have a future.” At the time the unemployment rate was at 5.8 percent.
Now we are well into 2011, and the unemployment rate is 9.1 percent. The economy is still failing and jobs haven’t been created. Many people immediately turn the blame over to President George W. Bush. The truth is that the unemployment rate only rose from 4.7 percent in 2001 to 5.8 percent in 2008. That’s a total of only 1.1 percent. Obama is not even a full three quarters of the way into his first term, yet the unemployment rate has gone up 3.3 percent.
The unemployment rate only accounts for people who have actively sought work within a prior four-week period. People who are unemployed but do not actively seek employment are known as discouraged workers. This group of people, believed to be more than one million, do not factor into the unemployment rate.
To further add to our problems, Obama does not have a solution. In 2009, as part of his American Reinvestment and Recovery Act, he announced his new energy team and boasted about “shovel-ready projects all across the country.” He repeatedly made mention of the term “shovel-ready” and claimed to have met with governors that all had projects that were ready to break ground. In 2011, when asked about these “shovel-ready” jobs, Obama laughed and said “shovel-ready was not as shovel-ready as we expected.”
One of the biggest issues with job creation today is the regulations imposed on employers. Since the Obama administration has taken office, employers now have to be compliant with a number of different regulations that include the new healthcare laws and newer Environmental Protection Agency restrictions. Everyone from the family farmer to the small business to the large corporation is being hindered by these regulations. As a result, companies are fearful of hiring because of the uncertain future and the impact on their businesses.
The best thing that Obama and his administration could do today is listen to the companies that do the hiring. There are a number of plans that have been introduced by members of Congress, such as Sen. Ron Johnson (R-Wisc.) who presented a bill declaring a moratorium on major regulations until unemployment drops below 7.7 percent.
The only way to get the job market growing again is to encourage businesses to hire. Offering incentives to businesses is key to promoting job growth. While the president might think he offered hiring incentives, American companies are proving him wrong. It is time for Obama to honor the promises he made and get more Americans back to work.
— Joshua Segall is a management information systems senior. He can be reached at email@example.com.