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Pity the Poor Keynesians

Posted By Conn Carroll On July 9, 2010 @ 4:36 pm In Economics | Comments Disabled

[1]

The Obama administration and their Keynesian media allies are desperately pushing back [2] against a growing consensus [3] that President Barack Obama’s expansive and intrusive domestic agenda is to blame for high unemployment and the economy’s slow recovery. So in Paul Krugman’s Pity the Poor C.E.O.’s [4] column today he asserts:

So where’s the evidence that an antibusiness climate is depressing spending? The answer, supposedly, is that this is what you hear when you talk to entrepreneurs. But don’t believe it. Yes, when you talk to business people they complain about taxes, regulations and the deficit; they always do. But the Obama’s-socialist-policies-are-wrecking-the-economy chorus isn’t coming from businesses; it’s coming from business lobbyists, which isn’t at all the same thing.

Krugman needs to start talking to more businesses. His own paper [5] reported from a White House sponsored event last December:

Mr. Obama told the chief executives that he wanted to know: “What’s holding back business investment and how we can increase confidence and spur hiring? And if there are things that we’re doing here in Washington that are inhibiting you, then we want to know about it.”

He got a blunt answer from Fred P. Lampropoulos, founder and chief of Merit Medical Systems Inc., a medical device manufacturer in the Salt Lake City area. Mr. Lampropoulos said some in his discussion group agreed that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”

Lampropoulos is not alone:

  • Dan DiMicco, CEO of steelmaker Nucor Corp, told the Wall Street Journal [6]: “Companies large and small are saying, ‘I am not going to do anything until these things — health care, climate legislation — go away or are resolved.’”
  • Porta-King CEO Steve Schulte told USA Today [7] his company is not investing because “proposals in Congress to tackle climate change and overhaul health care would raise costs.”
  • Stock analyst Peter Sidoti told  The New York Post [8]: “‘There hasn’t been one bankruptcy,’ he tells me. How did they survive the recession? By cutting costs and hoarding cash, not expanding their business and hiring more people, even as the economy now is starting to recover. During other recoveries, Sidoti says, firms like these would be hiring workers in droves as demand picks up for goods and services. This time around, they’re not — because ‘they don’t know what their costs are going to be.’”

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URL to article: http://blog.heritage.org/2010/07/09/pity-the-poor-keynesians/

URLs in this post:

[1] Image: http://www.heritage.org/Research/Reports/2010/07/Heritage-Employment-Report-June-Job-Market-Jolts-Economy

[2] desperately pushing back: http://www.politico.com/news/stories/0710/39495.html

[3] growing consensus: http://www.foundry.org/2010/07/09/morning-bell-anti-business-obama/

[4] Pity the Poor C.E.O.’s: http://www.nytimes.com/2010/07/09/opinion/09krugman.html?partner=rssnyt&emc=rss

[5] own paper: http://www.nytimes.com/2009/12/04/us/politics/04jobs.html?_r=2&ref=todayspaper

[6] Wall Street Journal: http://online.wsj.com/article/SB125954924769768987.html?mod=WSJ_hpp_MIDDLTopStories

[7] USA Today: http://www.usatoday.com/money/economy/2009-11-30-businessinvestment30_st_N.htm

[8] The New York Post: http://blog.heritage.org../2010/03/05/morning-bell-so-hows-that-pivot-to-jobs-going/Read%20more:%20http://www.nypost.com/p/news/opinion/opedcolumnists/how_obama_routing_the_recovery_zneMnksB1VnHzSS7QmuhnL#ixzz0hJIGRXJM

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