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Obama's Economic Faux Pas Finally Recognized

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

WASHINGTON -- A year and a half into his presidency, more Americans blame Barack Obama for the dismal state of the U.S. economy than George W. Bush. Obama has been traveling the country insisting that a weakening economy and high unemployment are still Bush's fault, but more and more voters are no longer buying that lame excuse, according to a new Rasmussen poll. It shows that 48 percent of Americans now say the president is to blame for the anemic recovery, versus 47 percent who still fault Bush.

With the economic growth rate sinking to a mediocre 2.4 percent, and major states experiencing jobless rates between 9 percent and 14 percent, it is dawning on voters that the Obama administration doesn't have a clue how to get the economy moving again.

The evidence for this can be found in the Democrats' latest plan on Capitol Hill: a $26 billion spending bill to help debt-ridden states pay their bills and keep teachers and other public employees on the payroll. No incentives to boost business investment or job creation. No plan to unlock venture capital for economic expansion and new start-up firms. No new trade initiatives to expand markets abroad for American-made goods and services.

Just more of the same bailouts to strengthen cash-strapped state governments at the expense of the private sector.

There is nothing wrong with the American economy that the right pro-growth incentives cannot fix. But Obama and the Democrats in Congress oppose such incentives, insisting that still more spending is the answer to our economic woes, even though it hasn't worked in the past.

Obama was out on the campaign trail this past week, maintaining that the Republicans and their allies in the business community have been opposing his economic agenda and have not proposed any alternatives. "Not lifting a finger to help," he said.

In fact, the GOP and the business community have been offering a broad range of job-creating proposals that always worked in the past and will work again, but they have been dismissed or ignored by the White House and Democratic leaders in Congress.

I asked a number of business leaders and trade associations what they would do to accelerate growth and create more jobs. All said the administration did not have a workable plan, and all had lots of ideas for how to do it better.

"We have no battle plan, no comprehensive approach for making manufacturing in the U.S. more competitive, more productive, and creating even more high-paying jobs," said John Engler, president and CEO of the National Association of Manufacturers. Among the NAM's proposals to put more Americans back to work:

-- Cutting the corporate tax rate to 25 percent or lower will create more than 2 million manufacturing jobs by the end of this decade.

-- Raise the R&D tax credit by 25 percent, which would sharply boost industrial reinvestment and innovation, increasing GDP by $206 billion and creating 270,000 new manufacturing jobs.

FedEx Chairman and CEO Fred Smith also thinks that the combined federal and state corporate tax rate should be cut to 25 percent or less. It is 50 percent higher than the average 26 percent of all other major industrialized countries in the OECD (Organisation for Economic Co-operation and Development) countries.

Smith would "accelerate depreciation of capital purchases more quickly. Every dollar in tax cuts for business depreciation adds about $9 in GDP growth."

Echoing his business colleagues in the global economy, Smith says we must "embrace open trade. The biggest economy in the world is the economy of world trade. After all, 27 percent of our American economy is based on international trade."

The National Association of Wholesalers and Distributors wants to kill the income tax hikes that Obama plans to raise at the end of this year.

"The automatic increases in tax rates on upper income earners, dividends and capital gains are already a huge disincentive to business activity," but the administration's proposals for additional tax increases will only further weaken the economy," the NAWD told me.

Among its two chief targets for repeal: taxes that will be imposed on employers under the health care mandates that will raise health care costs and kill jobs, and "regulatory overkill."

The National Federation of Independent Business, the nation's chief small-business lobby, wants to see estate tax and capital gains tax relief.

"Protecting small business owners from the return of the estate tax next year will provide immediate relief to many family-owned businesses," NFIB said. Small businesses also want to keep capital-gains rates low to promote new reinvestment in their enterprises and protect employers from getting hit by punishing tax increases on the sale of capital investments.

For the 3 million-member Chamber of Commerce, "Uncertainty is the enemy of growth, investment and job creation." Lowering the corporate tax rate would fuel job growth and "infuse our economy with fresh momentum." But curbing the government's rising budget deficits by boosting federal revenues is No. 2 on their wish list. One effective way to do that: "As much as $1.7 trillion in revenue could be generated over 10 years through numerous oil, gas and shale leases on our lands and off our shores."

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