Obama Can't Regulate His Way Out Of This Recession

Donald Lambro

9/3/2010 12:01:00 AM - Donald Lambro

WASHINGTON -- Optimism about America's future is in very short supply nowadays as we near the end of the third year of an economic recession with little or no relief in sight.

I know the White House and its allies will say that the recession is over and the national economy has begun expanding again. But for most of us, it still feels like a recession, with unemployment between 9 and 10 percent, a sharp slowdown in what was weak economic growth to little more than 1 percent now, and thousands of businesses, large and small, still struggling to keep their heads above water.

Nationwide polls show that two-thirds of Americans are deeply pessimistic about our country's direction. The economic vitality that has been the hallmark of our country has vanished. Banks, investors and venture capitalists are unwilling to lend. The once-daring spirit of entrepreneurial risk-taking that we saw in the 1980s and 1990s is hard to find in the present economic climate.

Insecurity, uncertainty, doubt and fear permeate our business environment, paralyzing our once great American jobs machine.

New-business formation has slowed. Venture capital is locked up in safe, secure bonds and hedge funds. Major corporations that have survived the 2008-10 recession are keeping surplus cash in reserve funds because they don't know what the future holds for them or the economy under the administration's failed recovery programs.

What will be the impact of the new health-care law on businesses large and small? It is loaded down with new mandates, higher taxes and penalties galore that will impose higher costs on business and the health-care industry. What are the costs of the mountain of regulations, penalties and credit restrictions that will come out of the financial-reform law, costs that will in the end be born by consumers most of all.

And the biggest fear that has slammed the brakes on business expansion, capital investment and job creation is President Obama's plan to raise the top two federal income tax rates on upper income people, investors and small businesses.

This is the dismal economic environment that Obama and the Democrat-run Congress has created in the past two years. More spending, bigger government and higher taxes, especially on the people who invest in our economy the most and the businesses that create most of the jobs.

In the 1980s President Reagan neatly described the government's economic policies before he came into office this way: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Reagan's characterization of the government's approach to the U.S. economy at that time eerily fits the description of Obama's anti-growth, anti-job- creation economic policies now.

The Congressional Budget Office, some of Obama's top advisers and business economists are forecasting high unemployment and anemic, subpar growth well into next year and beyond. There are no substantive economic-policy initiatives in the works to boost growth to get this country moving again, except much higher taxes, more regulation by an army of bureaucrats and, in the end, more bailouts.

There's nothing wrong with the American economy, its employers, workers, and venture capitalists that lower tax rates, incentives to invest and much smaller government cannot fix. We need to create a free market, free-enterprise growth environment for this to begin taking place.

We didn't become the largest and richest economy in the world by punishing success with higher taxes and wall-to-wall regulations that will hit every business and every consumer in the country. This is a recipe for economic decline. The Obamacrats are trying to convince us that this economy is the "new normal" and that we have to get used to slower economic growth for years to come in what they foresee as the age of limits.

Ronald Reagan strode into office declaring that there are no limits on what free Americans can achieve, that we have entered "the age of the entrepreneur." Obama, however, came into office declaring that this is the Age of Bigger Government that will now provide for all of our needs, if we give up more of our freedoms and turn over more of our income to Washington.

But government cannot create jobs, as we have seen over the past two years.

It can destroy them, however, as we've witnessed in the deteriorating economy and declining jobs numbers this summer.

"The economic ills we suffer ... will not go away in the days, weeks or months, but they will go away. They will go away because we as Americans have the capacity now, as we've had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom," Reagan said after taking office in 1981.

As America descended into the 1981-82 recession, Reagan cut tax rates across the board, championed American capitalism and reignited the optimistic spirit of a dispirited nation. The economy shot upward, with astounding quarterly growth rates and jobs that rose at the rate of 200,000 to 400,000 per month. America has never lost its capacity to repeat that performance, and will do so again under a new leader who believes in the power of economic freedom to create wealth, put Americans back to work, and rekindle the American dream.