With November midterms—one of the rare opportunities for revolution afforded in democracies—less than two weeks away, President Obama has amped up his smoke-and-mirrors show in addressing voters’ biggest concern: the economy. Time for a bit of unspinning.
In one of his last weekly addresses before this crucial vote, Obama slams Republicans for “rewarding corporations that create jobs and profits overseas.” So what’s his brilliant solution to curtail this kind of cheating? In Obama’s own words: “I want to give every business in America a tax break so they can write off the cost of all new equipment they buy next year. That’s going to make it easier for folks to expand and hire new people. I want to make the research and experimentation tax credit permanent. Because promoting new ideas and technologies is how we’ll create jobs and retain our edge as the world’s engine of discovery and innovation. And I want to provide a tax cut for clean energy manufacturing right here in America. Because that’s how we’ll lead the world in this growing industry.”
Aw, how cute. So these companies are going to suddenly do the morally correct thing because Obama is going to carve a little bit off the 51% peak corporate tax rate (which, incidentally is higher than even France at a flat 33%, the UK at 28% and Canada at 34%)?
How quaint to think that Obama believes giving a research and experimentation tax credit or “clean energy” kickback to hire American workers will be sufficient to placate everyone when Americans now have to cover their costs of Obama-induced increased healthcare premiums, their union dues, and the increased cost of living passed on to consumers as a result of Obama raising taxes on various corporations totaling $353 billion over ten years. Compare this with a worker in China or India who isn’t saddled with such a burden and who, in turn, doesn’t have any real demands on their employer. Put it this way: If you had a really high maintenance, gold-digging girlfriend whose entire family you were supporting, wouldn't you ultimately dump her if a much less demanding alternative came along?
The correct response of a real leader to corporate loopholes leaking billions of dollars worth of taxable productivity (and productive job opportunities) to competitive nations ought to be: “I plan to reduce government involvement in the employer-employee relationship, and reduce the burden of government on the average American citizen. This would hopefully assist in alleviating the pressure that drives American corporations to seek foreign employees and tax havens, and Americans feeling they aren’t adequately compensated for their hard work. It will also, in turn, serve to limit our dealings with regimes that do not share our values of freedom, limited government, and democracy.” Stumping in Seattle this week, Obama has been highlighting his stimulus package, acknowledging that it added to the deficit, but also pointing to a high-metals manufacturing company that was able to score a government contract by sucking on Obama’s stimulus package.
The same goes for a Seattle cupcake shop owner who was able to open a couple more shops and hire 30 more people because of a government loan. Of course Obama is applauding this, but whatever happened to growing a business organically?
Are we in such a big hurry to create jobs only to risk laying them all off because the growth wasn’t sound? Isn’t this mentality of borrowing instead of growing responsibly exactly how America got into this whole economic mess in the first place?
Private venture capitalists will lend money to people from whom they feel they have a legitimate chance of recouping investment. They have a responsibility to make sound decisions and choices. The government has proven to lack any such obligation. Why, then are they in this business at all? And why does Obama see this involvement as something to be applauded rather than cautioned based on recent history?
The more complex the mirage, the more effort and obfuscation required to sustain it. Obama ran on a platform of slight-of-mouth rhetoric, and if the recent polls are any indication, an increasing number of voters are gradually figuring out the tricks.