PrintFebruary 12, 2009
How to Wreck the American Economy
While the lessons of the 1930's and 1970's are obvious to all except Barack Obama and his amen chorus, there is another major factor that exists today that was not in play in either of those two previous periods.
The ideal of a world economy is in fact becoming a reality. This has come about as a result of the advent of new technology, global communications and enormous shipping capacity. Countries such as China, India and many other former third world economies have become major players in global trade (they were not in the 1930's or 1970's).
These countries have begun to develop their own middle class and raise the overall standard of living for their populations. In order to compete and continue this growth they must attract businesses and investment capital to their shores and be aggressive in their export activity. They can do so because of cheaper labor costs, lower taxes, fewer regulations and a benign legal environment.
The American worker now does truly compete with those in other countries and not just in the manufacturing sector. American companies too must compete and in order to do so are increasingly opening operations themselves or in joint ventures in these nations. Gone are the days when virtually everything we consumed was produced here or by our and European economic hegemony we were able to control world trade.
Instead of creating a positive business environment in the United States, we are doing everything possible to become fully uncompetitive in the world market.
1) The corporate income tax (state and federal) is among the highest in the world.
2) Litigation and legal costs are unprecedented anywhere and yet the current administration passes and proposes more measures which will result in additional expenses from the filing of specious lawsuits.
3) The prospect of the "Union Card Check" bill passing is real and will result in placing even more financial and operational burdens on U.S. businesses.
4) U.S. corporations are subject to a myriad of existing and now more proposed environmental, employment, pension and financial reporting rules and regulations at the federal, state and local level.
5) The Obama administration, in it's few short weeks, has shown it's willingness to demonize business to achieve it's political objectives as well as mandate how these companies are to be run, what benefits they must provide and what wages they must pay to this or that group.
Faced with these prospects more United States based corporations are looking to move their operations overseas. At the same time foreign based companies are having second thoughts about opening facilities in the U.S. I am an owner of a company that works with various countries primarily in Africa to provide equipment and financing for major capital projects. We have an office in the United Kingdom and the U.S. Often we talk to suppliers worldwide that have plans to open new facilities. Within the past month one such company, looking to open a plant somewhere in North or Central America, has decided not to consider this country because of the political and economic climate. The new jobs created would have been 500.
The Obama Administration's has chosen to spend its way out of this recession while increasing government involvement in the day to day lives of Americans and American business. Governments cannot create wealth, the only way to get out of this current debacle is to create more wealth and that can only be done by the people and businesses of this country. More money must be kept in their hands to spend and invest and an environment created wherein U.S. based companies are competitive in today's global economy.
If we continue on the course Barack Obama has chosen not only will job creation cease but unemployment will reach double digits, inflation will rival that of the 1970's and jobs lost to countries overseas will never return.
The misguided policies of this Administration must be fought; the long term health of this magnificent country is truly at stake.
