The current assertion that we are in a recession because the wealthy companies haven’t put money back into the system is just plain wrong. But even our president is peddling this idea. Last month, Obama chided businesses to hire more workers. Specifically, he said “it is time for companies to step up. American taxpayers contributed to that process of stabilizing the economy. Companies have benefited from that, and they’re making a lot of money, and now’s the time for them to start betting on American workers and American products.”
The problem with such a statement is the fact that although some companies are profitable, it doesn’t mean that they can afford to increase their hiring. Yelling at businesses to do so only makes him look like a petulant child.
The reality is that Obama’s unfriendly business policies have substantially contributed to the present uncertainty in the business world regarding long-term planning. The economy works on a set of facts; the existing tax rates have been in place since 2003 and there have not been higher rates since then. Making large changes, such as tax increases– as has announced he plans to do — will most certainly affect the economy, because there will be even less capital for companies to maintain and grow their enterprises.
In addition to tax rates, increased regulation and new regulation due to Obamacare are all causes for concern to businesses. Entities such as the EPA, SEC, NLRB and Dodd-Frank all have their hand in the pot. With pressure to keep up and comply with government’s nanny state, business owners are hesitant to invest. Unless changes are made to allow companies more freedom, they will hold on to their money. Other decisions, such as not pushing a Free Trade Agreement, and an enormous increase in spending since FY2008 all feed the hesitation and money pinch that the businesses feel.
Without true business-friendly reform, entrepreneurs will look elsewhere — namely abroad — to fund their ventures where businesses are welcomed, appreciated, and cultivated.