Nightly News Should Scrutinize Obamanomics

Donald Lambro
Wednesday, August 11, 2010

WASHINGTON -- One of the most important questions asked on the nightly news lately about the persistently high unemployment rate is why more jobs aren't being created in the economy.

But during the mostly shallow network news reports, that question is never really explored in any substantive depth because the answer has to do with President Obama's economic policies. To truly question it means honestly exploring the harmful impact of policies set forth and enacted by the administration and the Democratic Congress, which the networks are apparently reluctant to do.

Indeed, in virtually all the jobs reports I've seen on the nightly news shows, the administration's policies are rarely, if ever, mentioned. The question posed by the anchor is left essentially unanswered, except to say that businesses are reluctant to hire workers. Well, yes, but why? Why haven't these policies led to robust job creation?

The answer is the policies themselves have not worked, and many have in fact been job killers. Here are some reasons why.

1. No capital investment: The stimulus spending bill has been an abject failure because it offered no serious incentives for increased private investment, venture capital and new business formation -- the basis of new job creation. The bulk of the spending went into a black hole of wasteful federal, state and local programs, much if not most of it creating relatively few jobs, or at best temporary employment.

Christina Romer, who is leaving her job as Obama's chief White House economic adviser, left behind a forecast that said the jobless rate will not fall below 8 percent until the end of 2012. Enough said.

2. Business confidence: Recently, I surveyed the top business organizations in the country to ask them about the dearth of jobs under Obama's policies. All of them pointed to the severe job-killing tax and regulatory agenda they face that has destroyed confidence in the future.

3. Fear of higher taxes: No item on the Democrats' agenda is more paralyzing than the administration's plans to raise the tax rates on capital gains, dividends and investing, and on the top two income brackets, which will hit millions of struggling small businesses that should be responsible for roughly 70 percent of new job creation.

Businesses large and small, top economists and just about every CEO in the country say that with the economy showing increasing signs of weakness and slow growth, this is no time to be raising tax rates on anyone.

But Treasury Secretary Timothy Geithner recently said on Face the Nation, "The country can withstand that. I think it's good policy." No wonder businesses are pulling back, husbanding their finances and remaining reluctant to reinvest in the future.

4. Minimum-Wage Hike: Obama and Congress shoved up the hourly federal minimum wage in the midst of the severest part of the recession -- raising it from $6.55 an hour in 2008 to $7.25 an hour in 2009. It's possible no single government policy has killed more entry-level jobs than with this one.

5. Obamacare and jobs: No sooner did Obama sign his health care overhaul law, than a slew of companies began taking billions of dollars in new charges on their profit line to offset the higher costs they faced as a result of higher taxes for the $1 trillion plan. Boeing, Caterpillar John Deere and many others have said they will be forced to make cutbacks on their payrolls.

One study found that Obamacare includes more than a dozen tax hikes, fees or other penalties that will fall most heavily on middle-class workers and families, including a tax on those who do not buy government-approved health care.

6. Financial regulation bill: All regulations have their costs, and this one will be passed on to consumers in the form of higher credit costs and other fees. Those costs will also be offset with reduced payrolls. It will hit taxpayers, too, who will have to pay for the estimated 1,500 federal regulators Obama will hire to oversee the new laws.

But the ultimate job killer will be Obama's plans for the largest tax increase in American history, estimated at $3.8 trillion. Obama will sell this as a tax on the rich, but sensible economists, like University of Maryland's Peter Morici, warn that hiking the top tax rate "would sink the recovery."

"Increasing marginal rates to about 50 percent on half the income earned by (unincorporated) proprietorships would leave small- and medium-size businesses with too few resources and incentives to invest and create new jobs," Morici says.

There are many other job disincentives Obama and Congress have piled on the business community, but you get the point. We all get it, but apparently the nightly news networks don't.