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  • Bi-Partisan Dissaproval of Government's Role in Recession

    It’s a common refrain among progressives when criticizing free-market economic policy – “Conservatives are out of touch”. Conservatives don’t know how to create jobs, the progressive echo chamber booms. What we need to do is to spend our way out of the recession President Obama announces. The only people who think that government stimulus doesn’t work are at Conservative think tanks like The Heritage Foundation they go on.

    In this, as in so many other things, progressive policy analysts are out of touch. In reality, hundreds of experts agree from across the political spectrum that deficit spending by government to stimulate the economy is ineffective as a cure to recessions and may actually cause many more economic problems.

    An article in this week’s Barron’s magazine (January 18, 2010) is further evidence of widespread dissatisfaction with current economic policy in Washington. In the magazine’s bi-annual roundtable discussion with star investors, panelists appear to agree on one thing: the way Washington is responding to the economic crisis is contributing to the poor economy.

    • Scott Black the Founder and president of Delphi Management in Boston says. ”Much of the job creation in the past 10 or 20 years has been in small businesses. It hasn’t been in big corporations that lay off 10,000 or 12,000 workers at a time. The Obama administration’s health-care proposals could add substantial surcharges for these businesses. Marginal tax rates are going way up, which has created a lot of uncertainty for business. That’s one reason you haven’t seen a lot of new job creation.”

    • Mario Gabelli, the Chairman of Gamco Investors injects, “Small businesses have had trouble getting credit, and are uncertain about the added burdens of health-care reform.” The Barron’s host tells Gabelli that he acts as if the decline in jobs started with the introduction of the health-care bill. To which Gabelli says, “We are talking about why small businesses haven’t added workers in the past 12 months. Can I make money with that incremental employee?”

    • Meryl Witmer, General Partner at Eagle Capital Partners interjects, “Yeah, what is it going to cost? In the past six months, whenever I have talked to a company I asked the chief executive or chief financial officer what it would take to bring jobs here. They said, ‘You know, the workforce isn’t that good, and there is so much regulation. I’m moving jobs out of the U.S.’ The government needs to cut back on regulation and taxes and open things up for business, or the jobs will continue to leave.”

    • Scott Black later adds, “Nonresidential construction should have come back under the stimulus program, but it didn’t. The government budgeted $787 billion, including $40 billion for infrastructure, and yet very little of it has been spent. According to the trade associations more than $2 trillion of roads and bridges need to be built. The [Franklin D.] Roosevelt administration hit the ground running in 1933. It thought jobs were the best social policy. President Obama, instead of pursuing both health-care reform and cap-and-trade legislation, should have been putting American’s back to work.” The fact that infrastructure spending took too long to help mitigate the recession comes as no surprise to readers of this Heritage Foundation report. For more from the Barron’s panel of experts see this video.

    Of course, the Roosevelt administration’s jobs programs didn’t work either. What Congress and the Obama administration should do to reduce unemployment is outlined nicely in a Heritage Foundation WebMemo here. They should make sure they are not throwing up barriers to hinder small businesses from hiring workers, or achieving success.

    Posted in Economics [slideshow_deploy]

    8 Responses to Bi-Partisan Dissaproval of Government's Role in Recession

    1. Alex, Colorado says:

      It seems our focus is mis directed here. As I see it, the death tax is not what is hendering job growth or economic growth it is alack of the large think tanks and other foundaations to come up with a viable industry to replace the middle-class industrial industry of the automotive worker. I think that your comments are an example of the narrow thinking that is plagueing our nation and hendering the thinking out of the box or inventive thinking processes. The article made me think only that the business owners exhibited shortsighted thinking and certainly no planning for the future of the bussiness. They did not utilize the adjunct industries that could have enhanced there bussiness (insurance). Come on what are our educated minds doing? Are they existing just for pretty as is much of what we exhibit these days.

    2. Bobbie Jay says:

      why would anyone want government where mankind can do it for themselves? If it wasn't for government unnecessary intervention of mandates, regulations and taxes, smaller businesses would feel a lot more comfortable hiring and growing. If there was freedom to think, more innovations would be established. FREELY, without government influence.

      More government = Higher taxes = LESS FREEDOMS FOR ALL!!

    3. RJM, Chicago says:

      Progress is all about which direction you're heading in.

      The Scott Brown win is just emblematic of a bigger problem the Obama administration is running in to: People have wised up to the progressive Left agenda he came to Washington to implement.

      Progress is a nice word, but if you are progressing towards nothing, or worse still, towards a Saul Alinsky-like vision of America, then we need to change direction.

      Check out this post: http://rjmoeller.com/2010/01/scott-brown-obamacar

    4. Tom/Georgia says:

      Why do so many people refer to the political far left as "progressives"? Their every policy initiative is regression to policies that have already failed at least once.

      Conservative methods and means can be used effectively to accomplish both conservative and liberal goals and objectives. Liberal methods and means have never accomplished any goals or objectives for which they were used.

      It is liberal designs that are flawed; not necessarily liberal goals and objectives.

      Limited government is a survival necessity for a nation. The United States is already "over-governmented" to the level of unsustainability.

      Good, honest and honorable government is the only possible redemption for the evils of taxation.

    5. Peter Erickson, Rock says:

      The Democrats intend to destroy our economy so that their move to socialism will seem more acceptable. They know that reducing business taxes will premote business expansion and more jobs but don't want that. They know that electrical energy cost will "skyrocket," with "Cap and Trade" (Obama's words).and result in jobs moveing to China. and they Know that Billions of stimulus will bankrupt our country with no job increase. Peter Erickson.

    6. duelles, santa fe says:

      Living, as I do in Santa FE,NM, I encounter the far left on a daily basis. They call themselves progressives. I have dinner with them in their homes and visit cordiallywith them. They live for themselves a very conservative lifestyle in how they earn money , spend it, save it. For the most part their is a blank spot where others are concerned. The hoi poloi is not smart enough to make the right decisions as they have. The hoi poloi needs help, guidance, where choices are not 'proper' – help to offset those choices.

      There is only the Serenety Prayer for them. I cannot change them. And yes they are quite hypocritical, although they see it as caring.

    7. Drew Page, IL says:

      Progressive? My God, what are they progressing toward? If 2009 is any indication, we are progressing toward collapse. But then again, maybe that was the plan all along.

    8. Spiritof76, NH says:

      Massive government spending to create jobs is similar to the eighteenth century medical practice of draining blood to cure the disease. I can not understand why anybody with common sense could think that the government can siphon funds from one sector to lavish on another would create net job increase. Where do we get these so-called economists that believe in that sort of non-sense? The government does not produce wealth. It merely taxes the productive or borrows, either of which is detrimental to economic growth-no growth, no jobs.

      Government must cut SPENDING, cut taxes, eliminate regulations, allow the companies to fail or succeed on their own and must shrink. Otherwise, it is just a matter of time when America will be a poverty-stricken second rate country unable to pay interest on its crushing debt.

    9. Tim Az says:

      I'm really not sure how much more Chaiman Mao-Bama can do to cinvince these people that he must collapse the dollar to destroy the free market system. This is the only way to institute socialism in America while he continues to progress towards the utopia of communism. It's not that hard to see. Still too many refuse to accept this disturbing reality.

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