...I’m moving. They are doing everything possible to destroy jobs.” So says Emerson Electric CEO David Farr, who was promptly attacked by administration officials.
He's right. Whether through incompetence or ideologically based intent, our government is damaging the economy and discouraging job formation during the worst downturn since the Great Depression. Take for instance, the misnamed 'stimulus'. Financed entirely by deficit spending, it's taking over a million dollars to create one 'job', often a public employee position that should have been cut to balance a state or local budget. From the same article, the private sector puts just over $300,000 of capital to work to create a job, capital less available because it's been diverted to government debt.
That's assuming business is willing to risk capital in the current environment, where one now must assess political as well as market risk. From the point of view of one small businessman, it looks like this:
Over the last year the Congress and Administration have:
- Printed trillions of dollars of new money, raising the risk of future inflation
- Borrowed trillions of dollars, sucking capital out of private lending markets
- Run up deficits that pretty much guarantee future tax increases
- Toyed with health care bills that will substantially increase the cost of labor
- Toyed with climate bills that will substantially increase the cost of fuel and electricity
- Demagogued industries with average to below-average profitability for making obscene profits that must be reduced (e.g. health insurance companies who make 3-4% of sales)
- Taken over whole industries (autos, banks) and run them to the benefit of favored political constituencies, even when it violates the law (e.g. trashing for secured creditors of auto companies in favor of the UAW).
- Demonstrated a disdain for money-making by imposing populist compensation limits on executives of out-of-favor companies and industries.
- Spent money in the stimulus mainly to add government jobs, every one of which is generally focused on making my life running a business harder. If you do not understand or believe this, you have not run a business that employs people.
- Shown a general philosophic hostility towards markets and capitalism
What sane person will put up risk capital, with a potential payoff years in the future, in an environment like this? Is it any wonder that analysts now think umemployment will reach 12 percent or higher? (More likely 20% if you count those who have dropped out entirely from discouragement.)
Mr. President, you're not helping. You're making things worse.