Millions of Americans still wonder why our current President remains so utterly clueless on economic policy. There is certainly a good argument that his leftist agenda, illustrated by his tiresome class-warfare blather and his continuing scorn for our most productive – and most job-creating – citizens, is the crux of the problem. The actual reason, however, is his complete lack of experience with basic economics and finance.
A couple of stories from my own CPA practice might help put this into perspective. A client of mine – a hard-working, successful entrepreneur considered by his peers to be a brilliant computer programmer – recently asked me for some help acquiring a vacation home. This man is extremely intelligent, yet when it came to understanding the relevant IRS tax regulations– even after carefully reading a “user-friendly” synopsis that he found on the Internet – he was baffled. What I did for him is what I do for all of my clients. I took these complex rules and explained them – along with their economic ramifications – in simple, plain English until he was comfortable enough to make an informed decision on his investment.
Over the years, this process has taken place hundreds of times which provides value to my clients. Anyone can plug numbers into a form, but understanding how economics and our tax system works, and then being able to clearly explain it to clients, comes from years of experience. More often than not, these clients are extremely smart and successful in their own field, but they have never spent the time and energy to grasp these fundamental issues.
I had a discussion with another gentleman who became an IRS agent after a lengthy career in the banking industry. We immediately communicated, principally because his banking years had provided him with a good business foundation -- unlike most of the people the IRS hires who seem to be sociology or history majors who can’t find a job elsewhere. Sure, they go through IRS training, but they never really grasp the intricacies because they have no starting point. They don’t understand business. They can’t relate to what I do because they have no frame of reference, having avoided the topic until their original degrees left them jobless.
Mr. Obama may be a smart man, but he cannot become a business brain through osmosis. It takes experience and a certain aptitude, neither of which he appears to have shown any interest in obtaining. He never even worked at a McDonald’s to understand simple business basics. There he would have observed manpower requirements, personnel management, inventory control, quality control, customer relations, and more – even if he was just an entry-level employee.
But you say that he has some of the best people in the world to educate him. And you would be wrong. Sure, people like Tim Geithner and Larry Summers are at the top of the economics world – but have you ever listened to how economists speak? Usually, the hardest part is staying awake! They have little or no ability to explain these topics to the unsophisticated, and they would never insult the President by speaking down to him. But that is exactly what would have to be done for Obama to understand the ramifications of his policies.
It is highly doubtful that anyone ever informed Mr. Obama that his recent small business bill will never work. First, the principal reason that a loan bank for small businesses is even necessary is because the federal government has soaked up almost all available funds to feed the massive $1.3 trillion deficit. Second, the economic uncertainty – directly caused by the Administration’s senseless obsession with raising taxes and imposing crippling new costs on American companies – has made small businesses hesitant to seek loans at all. To many entrepreneurs, the issue is no longer how to grow the company – it’s how to sell it! Finally, businessmen know that these artificially-low interest rates won’t last, and they realize that if they commit to adjustable-rate loans, they will eventually get whacked with unaffordable interest costs.
Trust me on this: Nobody – not Geithner, not Summers, nor Tony Rezko ever explained any of this to Obama, who has never been involved in business during his lifetime. He hasn’t taken the time to read the Wall Street Journal daily for the past thirty years, so he has no focus. He hasn’t relied on Forbes or Business Week to help understand the business perspective. He has put forward no effort at all to understand that “the business of America is business,” and so he has no idea how to create and promote policies that encourage businesses to risk, prosper, and grow.
There is little hope that Mr. Obama will ever establish a positive business environment. He will continue to attempt to pick winners and losers, micromanage economic policy, and speak only of the harm that big business does to America. Mr. Obama does not seem to understand that every big business started as a small business, and does not recognize nor appreciate the commitment and hard work necessary to become that big business.
This is his basic problem. He will forever be a wall slowing down the natural entrepreneurial instincts of the American people. The only question that remains is whether Americans will run him over doing what they do best – business.