James Pethoukokis writes today how Obama's very policies are freezing up the jobs market.
Let’s assume that the much-hyped White House “jobs summit” turns out to be a free-flowing exchange of ideas and views. Could happen. If that’s the case, then President Barack Obama shouldn’t be shocked if a few CEOs dare suggest that the sweeping-yet-stalled Obama agenda might … actually … you know … no offense, Mr. President … be contributing to the jobless recovery. (The union and academic invitees will protest mightily, natch.)Perhaps some of the CEOs there today could explain how Obama's own proposals are exacerbating the business picture. But such straight talk is not what they're there for.
CEOs are saying as much amongst themselves. At a recent symposium, Intel boss Paul Otellini, a contributor to both parties, expressed concern about the “amount of variability in the system” created by the state of policy flux in healthcare, energy and tax policy. “It is very difficult to make a hiring decision,” he said. General Electric chief executive Jeffery Immelt, a strong supporter of Obama’s cap-and-trade proposal, added he would just like to “know what the rules are.”
All in all, a disturbing replay of the 1930s when FDR’s big changes left business reeling with uncertainty and confusion. The “devil you don’t know” and all that.
Small business is certainly with Big Business on this, particularly regarding the mercurial nature of healthcare reform. The substance of ObamaCare continues to morph daily — from the state of the public option to employer mandates to financing expanded coverage – as Senate leader Harry Reid scrounges for votes. On energy, the president will make big promises at Copenhagen even though cap-and-trade looks stillborn in the Senate.
As for financial reform, Senate banking committee chair Chris Dodd has proposed sweeping changes, while the Tim Geithner-Barney Frank version in the House seems beamed in from a universe where the credit crisis never happened. Compromise could prove elusive. Even Obama’s tax reform panel has delayed releasing its findings.
(And that gets at another critical flaw with the jobs summit. As any of the executives could tell Obama, brainstorming sessions are often the tool-of-choice of the highly ineffective manager. Such confabs are frequently used to give team members the illusion that they are contributing to the idea generation process. In fact, the manager has already made his decision. And that is, more or less, the case with Obama. At the very least, don’t expect any CEO suggestions of lowering personal, corporate or investment tax rates to get even a whiff of consideration from the White House.)UPDATE: Robert Samuelson has more on how Obama hasn't helped the employment picture.
Of course, Obama could pivot and revamp healthcare reform into a more incremental, targeted bill that might actually pass with decent margins in both houses. And while cap-and-trade is gasping for air, a deficit-neutral carbon tax (offsetting payroll taxes) might actually pull in significant Republican support. Maybe even a fat payroll or corporate tax cut.
But the tendency toward election-year gridlock is fast approaching. And for frazzled Corporate America and a frozen job market, gridlock – and the uncertainty that goes with it – is not good.
But the perception that the administration will tolerate, despite rhetoric to the contrary, permanently large deficits could ultimately rattle investors and lead to large, self-defeating increases in interest rates. There are risks in overaggressive government job-creation programs that can be sustained only by borrowing or taxes.
Obama can't be fairly blamed for most job losses, which stemmed from a crisis predating his election. But he has made a bad situation somewhat worse. His unwillingness to advance trade agreements (notably, with Colombia and South Korea) has hurt exports. The hostility to oil and gas drilling penalizes one source of domestic investment spending. More important, the decision to press controversial proposals (health care, climate change) was bound to increase uncertainty and undermine confidence. Some firms are postponing spending projects "until there is more clarity," Zandi notes. Others are put off by anti-business rhetoric.
The recovery's vigor will determine whether unemployment declines rapidly or stays stubbornly high, and the recovery's vigor depends heavily on private business. Obama declines to recognize conflicts among goals. Choices were made -- and jobs weren't always Job One.