Monday, February 7, 2011

Show Him the Money

President Obama spoke to the Chamber of Commerce on Monday in an attempt to “reach-out” to the organization which has been a critic of the administration and its anti-business practices.
Obama used the opportunity to remind the Chamber that his administration is working to remove “burdensome regulations” but that they need to realize regulations are a “good thing.”  He stated that “The perils of too much regulation are matched by the dangers of too little.”
A couple more interesting quotes from his speech:
“Already we’re dramatically cutting down on the paperwork that saddles businesses with huge administrative costs …”
“The role of government is to support the economic foundation by spending public money to improve transportation, education and communications systems. But businesses . . . must do more to help America as a whole and not just their own bottom line.”
“If I’ve got one message it’s now is the time to invest in America . . .Today American companies have $2 trillion on their balance sheets. … I want to encourage you to get in the game.”
Obama seems to be sticking to his message.  At this point I am not sure if he does not realize how anti-business his policies are, or if he is simply stubborn and unwilling to acknowledge it in public.  The idea that his administration is cutting back on paperwork is just plain wrong.  Obamacare will do nothing but bury small businesses with mountains of additional paperwork, including the 1099′s the bill requires (although this requirement is likely to be removed from the bill).
The statement that it is government’s job to support the economic foundation may be true in some ways, but there is no sense in building any sort of foundation when it is sure to crumble under the weight of burdensome regulations and taxes.  In reality if the federal government got out of the way, private business would likely build their own foundation.  What they could not build would be the responsibility of the states not the federal government.
Business, unlike government, has no choice but to be concerned with its bottom line business does not have access to unlimited credit.  Something the left refuses to understand is that businesses exist to make a profit.  Without profit there is no reason for them to exist, and without profit a business will collapse.  The idea of making a profit is not an evil concept.  These profits are not what cause homelessness, or foreclosures, or unemployment.  It is the government that causes those things.  Most businesses would like nothing more than to hire employees, give employees pay raises, and expand facilities.  But to do these things without consideration for the bottom line is foolish and would only lead to everyone at that business being out of a job.
President Obama seems to think that the source of the continued economic problems in this country is private business sitting on cash reserves rather than spending or investing that money.  To some degree that may be the case, but business are acting defensively because they have no way to predict what regulation, tax, or other requirement may pop up next.  Just as I have moved most of my aggressive investments into safer alternatives businesses are doing the same thing.  At this point cash is the safest asset they can posses.  Investors and businesses of all sizes are sitting on the sideline for a good reason:  they are scared.
Until the administration and reassure investors and businesses that it is safe to “get in the game” they will continue to sit on the side, and the economy will not recover as it should.  The President has less than a year to understand this concept and act on it, otherwise he should not waste the money on a 2012 reelection bid.

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