by | ARTICLES, BLOG, BUSINESS, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, TAXES
Earlier in the month, Steven Russolillo correctly reported on weak business investment as a key reason for poor economic growth. However, it was incredibly frustrating that as an economic writer, Russolillo, could actually suggest this was a surprising phenomenon. It’s not surprising. In fact, it’s downright predictable. The Obama Administration has been steadily undermining businesses for years and this is the fallout of their policies.
Even though Russolillo should have known this, he could have also easily interviewed any number of business owners for his article; if he did, he would have found a multitude of reasons for weak business investment, including 1) anti-business attitudes; 2) threats of higher taxes; 3) actual higher taxes; and 4) increased government regulations. Instead, Russolillo made the rookie mistake of only talking to fellow economists, the ones who look at data and trends instead of actually being in the trenches of everyday business activity.
Russolillo acts as if low rates are the only key to business spending; they’re not. Businesses won’t spend if they continue to feel the threat of the government’s heavy-hand. Better to keep the company stabilized than attempt to stretch and expand and invest; you have no idea what new regulation or new tax will continue to wreak havoc on your long-term business plans and cash flow — they way this administration has done for the last seven years.
Businesses are tired of being treated as an both a source of extra government revenue and a playground for intrusive, burdensome policies that hurt, rather than help, our economy. It’s a no-brainer to anyone who is anyone in the business world why businesses are hesitant to invest; it’s a shame that more economists don’t know how to engage in critical thinking and basic journalism.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, GOVERNMENT, OBAMA, OBAMACARE, POLITICS, TAXES
Here’s another ridiculous article by “economist” Grep Ip, wondering aloud once again why the economy isn’t doing any better, and why low interest rates haven’t helped. Either he’s truly incompetent as an economist not to see the detrimental effects of government policies on businesses and the economy, or he’s playing dumb to give cover to the Obama Administration by pretending their policies aren’t harmful and looking the other way in his analysis.
Ip writes, “One of the great mysteries of the recovery is why low interest rates have done so little to lift business investment. After all, that is supposed to be one of the ways monetary policy works: A lower cost of capital makes any project more viable. But what if lower interest rates are actually hurting investment by encouraging companies to pay dividends or buyback stock instead?”
This is exactly what is happening — it’s no mystery. But he draws no substantial conclusions. If he would just come down from his ivory tower of what is “supposed to happen” under Keynesian economics, and actually observe what is happening, he might actually learn something. The fact of the matter is, Obama’s policies are destroying our business environment and eliminating the opportunity.
The burden of over-regulation, the increases in taxes, the litigation-friendly environment, the overreaching government agencies, Obamacare, unprecedented debt and more — all of these factors cause businesses to essentially pause their business strategy. Who in their right mind really would consider substantial investment in an environment that is hostile to workers, and an economy that is now seeing more businesses close instead of open? The risk is often too great. Sitting it out is a safer bet.
Not only is it not a mystery as to why low interest rates haven’t spurred growth, it’s a no-brainer. To ignore the government’s effect on business and the economy is unprofessional and incompetent. “It’s the government, stupid!”
by | ARTICLES, BLOG, CONSTITUTION, ECONOMY, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA, OBAMACARE, POLITICS, TAXES
Congressman Dave Brat wrote a stunning Op-ed in the Richmond Times Dispatch (“Immigration is killing Americans’ job prospects“) in which he blames immigrants — both legal and illegal — for the current anemic economy. Rightly citing “meager job growth” and “stagnant wages” as symptoms, he then makes a crass and erroneous conclusion that the problem is immigration.
Immigration is not killing Americans’ job prospects — government policy is. We all know that. Why does Congressman Brat ignore the elephant in the room? Brat talks about statistics and “jobs availability” as if the economy was a zero-sum endeavor and there is a finite amount of jobs available to go around, from which outsiders are taking more than their fair share. That’s absurd.
The reality is that job creation and growth by businesses — signs of a healthy economy — have slowed to a crawl because of 1) excessive and onerous regulations unleashed in the last several years; 2) increased taxes, and the high corporate tax rate; 3) overreaching agencies such as the NLRB and EPA; 4) Obamacare; and so forth.
These are all aggressive, anti-business policies that small and large businesses have had to increasingly contend with in our country. They are the reasons why more businesses are closing than opening and investment has declined. Businesses can’t afford to stay in business, comply with government diktats, and create new jobs.
To go after legal and illegal immigration while simultaneously ignoring the government’s culpability is disingenuous at best and pandering at worst. With a diatribe that strenuously complains about “the presence and availability of immigrants — whether legal or illegal, permanent or temporary — in the job market,” Congressman Brat sounds like he may be setting us up for a Trump endorsement down the road; such a line of ridiculous thinking is more compatible with Trump’s “Make America Great Again” slogan than any rational, logical economist — which is what Brat purports to be.
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Grim news from the Wall Street Journal:
“The U.S. job market notched its weakest monthly gain in more than five years, knocking down expectations for a Federal Reserve rate increase and stirring worries about the seven-year-old economic expansion.
Employers added 38,000 jobs in May, the weakest performance since September 2010, the Labor Department said Friday. The unemployment rate, obtained from a separate survey of households, fell to 4.7% from 5% in April largely due to a steep decline in labor-force participation.
Revisions to previous payroll data showed employers added a combined 59,000 fewer jobs in April and March than previously reported. That brought average monthly job growth in the past three months to 116,000, a sharp slowdown from the average growth of 219,000 over the prior 12 months.”
Economists had forecast payrolls rising by 164,000 in May and the unemployment rate falling to 4.9 percent.
And more perspective: “A record 94,708,000 Americans were not in the labor force in May — 664,000 more than in April — and the labor force participation rate dropped two-tenths of a point to 62.6 percent, near its 38-year low, the Labor Department’s Bureau of Labor Statistics reported on Friday.
When President Obama took office in January 2009, 80,529,000 Americans were not participating in the labor force; since then, 14,179,000 Americans have left the workforce — some of them retiring and some just quitting because they can’t find work.”
As I have stated numerous times over the years, the government’s stranglehold on small businesses in the form of wage meddling, over regulation, and tax increases have kept the economy from being able to recover properly. It will still continue to limp along until policy changes are made.
by | ARTICLES, BLOG, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, POLITICS, QUICKLY NOTED, TAXES
The 1st quarter economic report was released — showing minimal growth, and The White House pointed to factors other than its own policies, of course.
“The Department of Commerce reported that U.S. gross domestic product rose 0.5 percent in the first quarter of 2016, the third straight sluggish start to a year. Consumer spending and business purchases both fell. Jason Furman, Mr. Obama’s top economic adviser, blamed the first-quarter slowdown on “weak foreign demand and low oil prices,” and some private economists say growth should pick up later this year.”
Time will tell when the jobs report comes out in early June if growth is apparent or not.
