Karen, the Lonely Conservative, has two articles up on the economy that your Editor sees as related.
June 4, 2012
The AP had an interesting piece on employers and hiring over the weekend. Basically, employers aren’t hiring because there’s so much uncertainty out there. What will Obamacare cost? What will tax obligations be when the Bush tax cuts expire? So many questions, so few answers.
Jason Speer is nervously watching Congress and possible tax changes as Bush-era income tax cuts near expiration at year’s end. He’s a vice president of Quality Float Works of Schaumberg, Ill., which makes devices to monitor fluid levels in tanks.
Speer says he’d feel a lot better about hiring later this year if it weren’t for the uncertainty about federal taxes. Unable to anticipate his company’s costs, Speer says he can’t make decisions about growth and hiring.
“We don’t know if there’s something around the corner that’s going to hurt our business,” Speer says.
Who is trying to stop the tax hikes from going into effect? Not President Obama, he’s too busy campaigning.
Sen. [John] Cornyn [R-TX] says the impending tax hikes will do far more harm than good:
“Raising taxes is the last thing we should do amid the weakest economic recovery since World War II. Unfortunately, even if we avoid the full ‘Taxmageddon’ scenario, President Obama’s health care law also contains a new surtax on investment that will take effect in 2013. This new surtax will hamper small business investment, which is the lifeblood of private-sector job creation.”
But, in the president’s opposition, there’s a bipartisan movement growing to stop them, Conryn said:
“The good news is that we now have an emerging bipartisan consensus on tax reform. The bad news is that President Obama is missing in action. (Read More)
Senate Majority Leader Harry Reid [D-NV] hasn’t been very helpful either. President Obama loves blaming everything on Congress, specifically Republicans, but it’s Reid that keeps any bills from passing.
[Republicans] didn’t have time to filibuster anything, it was over so quickly. Moreover, their ability to take meaningful action was effectively nullified by four specific parliamentary maneuvers taken by Mr. Reid.
Why does the majority go to all this trouble? The simple answer is to protect its members from tough votes.
More at the link. The Democrats tried the tactic of protecting their members from having to cast tough votes in the second session of the eleventy-first Congress. Despite having huge majorities in both Houses of Congress, the Democrats never even tried to pass an overall budget resolution, attempting to spare their weaker members from having to defend their votes during the 2010 campaign, and only two of the twelve annual appropriations bills were passed by the House of Representatives, and none by the Senate. Somehow, that absolutely brilliant strategy didn’t seem to do them all that much good. Your Editor suspects that Democratic voters would like to see some actual fight from their congressmen, just as much as do Republican voters. If you get into a fight, you just might lose, but nobody ever won a fight he ran away from.
Then there was a second article:
June 4, 2012
This morning we found out that US factory orders failed to meet expectations in April. How often do we hear that these days?
New orders for U.S. factory goods fell in April for the third time in four months as demand slipped for everything from cars and machinery to computers, the latest worrisome sign for the economic recovery.
The Commerce Department said on Monday orders for manufactured goods dropped 0.6 percent during the month. The government also revised its estimate for new orders in March to show a steeper decline.
Economists had forecast orders rising 0.2 percent in April.
The Dow struggled all day, and ended down about 17 points, marking a four day losing streak.
So, what did President Obama do today? Not much, except for flying off to New York City to snarl traffic and attend a few celebrity-studded fundraisers.
Update: Bill Quick on the media reaction to bad economic news: “All boo the horrible, dying Worst Ever Bush Economy!”
It’s one thing for businessmen to say that they are very cautious about hiring because they are so uncertain about the upcoming taxation and regulatory environment, which must be true for at least some of them, but it’s also true that if the orders for their products are falling, there is no need to hire new people in the first place. Your Editor suspects that some of the former affects the latter: purchasing manufactured goods, especially if the purchases are made by other manufacturers rather than consumers, is something that must be very conservatively considered if you are uncertain that you will be able to sell your products down the line.
Barack Obama has been President of the United States for three years, four months and fifteen days. If businessmen don’t know what to expect from this Administration by now, they never will . . . and that is because the Obama Administration has yet to demonstrate a coherent, well-thought-out plan. Our friends on the left will naturally blame the evil Republicans for this, but the simple fact is that the Administration had huge majorities in both Houses of Congress, including a filibuster-proof majority for a while in the Senate, and didn’t really develop any coherent plan even then. The Democrats got a lot of (bad) legislation passed, and then the Administration kept issuing waivers for all sorts of companies and even states. How much support could the Administration have had for its own legislation if it kept issuing waivers of the provisions of the Affordable care Act?
The Democrats will complain that most businessmen will be supporting former Governor Mitt Romney (R-MA) in the general election, but they’ll never really understand why. Businessmen have political positions all over the place on the issue which don’t closely relate to their businesses; they may not care about abortion or same-sex “marriage” or illegal immigration or National Public Radio or increasing obesity. Indeed, many businessmen might just support the Democratic Party positions on abortion (pregnancies cost businesses money) or immigration (illegal immigration might enable them to hire workers for less money) or Michelle Obama’s campaign against obesity (their workforce will be more productive if it is healthier), for reasons they consider to be solidly grounded in their business principles. But the most important consideration of any businessman is making a profit, and businesses have not seen much business-friendliness or concern for their profitability from the Obama Administration. Businessmen are primarily conservative on economic issues because they have to be: they need a solid, stable economic environment to be able to plan ahead on a rational basis, and they will support the party which seems more likely to support and provide that kind of business environment.
And Mitt Romney is a businessman. He understands economics in a way that the Administration’s stable of pet economists do not and never will, because for all of their research, all of their development of theory, they’ve never actually run a business or met a payroll. Perhaps some businessmen might not care for Mr Romney personally, and some might have serious misgivings about some of his changed positions, but they can still recognize a fellow businessman when they see one.