In a capital that’s at partisan loggerheads, both Democrats and Republicans increasingly agree on one issue: The Obama “stimulus” plan has so far failed to provide the jobs and spur the economic growth that the President promised. Having sold his package by claiming that the $787 billion legislation was essential to prevent unemployment from reaching 9% by 2010, it rose to 9.5% mid-2009, to the highest level in 26 years.
But the problem isn’t just that the President’s insanely expensive “stimulus” program has been ineffective. Worse yet, his administration and his party seem bent on actively pursuing policies that seem almost tailor-made to prolong and worsen the recession, making unemployment sure to rise higher than the Administration’s projected 8%.
Almost every week, Americans hear about some new Democratic plan for higher taxes. Most recently, Congressman Charles Rangel announced that the Democrats’ health care plan would be financed by a surtax on “the wealthiest Americans.” But Americans aren’t stupid – they realize that measures supposedly targeted only at “the rich” frequently “trickle down” to people of more modest means. What’s more, they frequently cripple small business – one of the great engines of job creation.
Then there’s the environment. The Obama-backed “cap and trade” legislation – which heavily fines energy consumption deemed to harm the environment – threatens jobs and American competitiveness. Numerous small businesses will be unable to keep their doors open, as the owner of a small St. Louis bakery chain pointed out last week, noting that even a 10% increase in power costs would be prohibitive given his 2% profit margin. So there go more jobs, if the President gets his way.
But it’s not just small business that’s under threat. The Obama Justice Department’s antitrust division is going after big business with a vengeance. It recently objected to a marketing alliance between United and Continental Airlines – which would have simply promoted efficiencies for the companies and better service for customers. And it’s scrutinizing the telecommunications industry – one of the few upbeat sectors in the current economy – to see whether large telecom companies have “abused the market power they’ve amassed in recent years.”
Such government grandstanding may be music to the ears of the big-business-hating left. But the threat of greater regulation and potential antitrust litigation paralyzes companies and their management, chilling innovation and suppressing profits, right at a time when the struggling economy needs more creativity and forward thinking, not less.
It’s impossible for the President and the Democrats to preside over an economic recovery when they push an agenda that punishes success and threatens productivity. When “the wealthiest Americans” know that their taxes are going to increase, they lack the confidence to make the investments and the purchases that would stimulate economic growth. When small businesses hear about a regime of heavy new fines, their owners don’t feel secure enough to expand their payrolls. And when those running big businesses realize that every move is going to be scrutinized and possibly second-guessed by a crusading Justice Department, they’ll become hyper-cautious – and less likely to take the risks that can spur dynamic growth.
The profoundly underwhelming response to the Obama “stimulus” bill highlights the truth that massive government spending alone can’t create prosperity. For that, one needs the private sector – “the wealthiest Americans,” small business, and big business included – to drive the consumption and create the jobs that will start America on the road to economic recovery.
Any other approach is nothing more than a wrong-headed attempt to repeal the laws of economic gravity. And even the “Obamessiah” can’t do that.