To my knowledge, Obama has never held a job that would have given him any real business experience. His pronouncements on economic matters strongly indicate that, lacking any familiarity with the way in which business operates, he is himself operating in a vacuum when it comes to his grasp on subjects of both micro and macro economics.
He has never learned that businesses are like living organisms. When they thrive, they create wealth–and that leads to the creation of jobs. Likewise when they are inefficient or have outdated products or excessive labor or product costs OR TAXES, they lose wealth and shed jobs to businesses that are more competitive. And, sometimes, those more competitive businesses are located outside the country.
While Obama has made statements about helping businesses in the U.S. become more competitive, what he seems to misunderstand is that the only thing the government can really do to help is get out of the way. And the best way to “get out of the way” is to reduce tax rates and tax code complexity and regulation. Anything else to “help” business, no matter how good it sounds, is coddling (or even damaging) in nature and, in the end, reduces the competitive edge.
But Obama isn’t actually talking about helping business. In his mind, business, particularly big business, is somehow divorced from the economy. In Obama’s mind, it seems, the economy is the cash flow to individuals and families. He has confused the golden egg with the goose that lays it.
Hurt, starve, or otherwise constrain the goose…say goodbye to the eggs.
Simple, of course, unless you come from an environment that depends on taking wealth in a way that does not strengthen the economy. Such is the world of Chicago grievance politics. The rich and the corporations have it (the wealth)–Obama’s we, the poor and disenfranchised, want it.
What Obama fails to realize is that corporations run on capital just as cars run on gasoline. They get it from customers’ purchases, and lenders, and investors. Take capital (known by Obama as simply wealth) out of the system by whatever means and you begin to starve the “golden goose.”
For example, take what the Investor’s Business Daily has to say about Obama’s recent “Emergency Economic Plan”…
It’s shocking that a mainstream candidate, with so many supposedly well-regarded economists advising him, would produce such a shoddy, poorly thought-out plan.
Take his proposal to send every family a check for $1,000. Don’t worry, he assures us, we won’t have to pay for it. “Windfall profits from Big Oil” will pick up the tab — in this case.
Sen. Obama seems to be trying to take advantage of reports that Exxon Mobil reported record second-quarter income — indeed, the highest quarterly profit for any corporation ever.
But the reality is that as Obama and his equally unknowing friends push windfall taxes, Exxon Mobil has already given the U.S. a massive windfall. As economist Mark Perry has noted, Exxon Mobil will pay more taxes this year to the U.S. Treasury than the bottom 50% of all taxpayers — combined.
In the first half, Exxon Mobil’s after-tax income rose 15% to $22.6 billion. A lot of money, to be sure, until you consider that Exxon Mobil paid $61.7 billion in taxes — also a record.
People shouldn’t fall for such cheap, recycled class-warfare argument. Yet many will. Sadly, it will saddle big energy companies with higher taxes and crimp their exploration and drilling budgets. That means less oil on the market and higher prices.