Starting or expanding businesses takes money from risk-taking entrepreneurs. We need to enact tax policies that offer incentives for new capital formation, like cutting the capital-gains tax, as President Clinton did in his second term when the economy soared, jobs were plentiful and incomes rose.
Obama not only condemned tax-rate reduction to get the economy growing again (until he and his party got a shellacking in the midterm elections); he wanted to raise taxes on investors, capital gains, corporations and Wall Street.
He has rarely sought the advice of top business leaders during his presidency, and you won't find one among his advisers or in his Cabinet. But if you ask business leaders, they will tell you the new Congress needs to do just the opposite of what Obama has been doing.
"We have heard candidates on both sides of the aisle talking about the importance of economic recovery, growth and job creation," says Jay Timmons, the incoming president of the National Association of Manufacturers.
"The way to ensure these important goals are met is to adopt lower tax rates, open new markets through free-trade agreements, lower energy costs by expanding domestic access ... and curtail burdensome and overreaching regulations that stifle growth," he said.
For the past two years, as unemployment climbed steadily higher, Obama sat on the South Korea, Colombia and Panama free-trade agreements. He finally embraced the agreement with Seoul but has sought no new bilateral-trade pacts that would risk offending powerful union bosses.
Wonder why gasoline is so expensive? U.S. moratoriums on offshore drilling have pushed gas prices to over $3 a gallon.
The incoming Republican-leaning Congress is already at work on these and other issues.
House Republican leaders say they are combing the budget for big spending cuts to come as soon as Obama submits his spending proposals. Over at the House Financial Services Committee, they've already begun going through the Dodd-Frank financial-regulation law "provision by provision."
An economic-growth and job-creation bill is being worked on as well and will be one of the first pieces of legislation Republicans will bring to the House floor early next year.
Obama now says he's willing to work with Republicans in the new Congress. They're going to give him plenty of opportunities to do so.