President Obama gave his “State of the Union” speech last week where he was supposed to snow us about how well his administration is doing in meeting the country’s challenges. I’ll admit I didn’t watch the live event. I just couldn’t stand all the contrived pomp and circumstance.
Obama claims to have “broken the back of the recession.” And yes the Stock Market is up but way too many Americans are unemployed for Obama and his band of misguided economic experts to lay claim to any level of success. Obama claimed in last year’s SOTU that jobs were his number one priority. Well, somewhere along the way he either forgot or his program has failed.
In this year’s speech the President even had the audacity to claim responsibility for new lower taxes that will spur the economy. Truth is, other than a “tax holiday” on individual social security contributions, Obama and his band of liberal Democrats were forced to abandon their plans to roll back the Bush tax cuts when the American people voted many of them out of office.
The American economy has proven time and again to be the most powerful economic system in the world, so what happened? What’s different this time?
Essentially we have abandoned everything that has worked. We have driven our jobs overseas with policies that make the cost of doing business in this country uncompetitive. We have shut down the development of our natural resources with environmental policies that are insanely restrictive. The net result is we are sending our wealth overseas to third world dictators who use it to wage war on us and fatten their own personal Swiss bank accounts.
If Obama really wanted to reenergize the economy here’s some changes that will actually work:
1) Remove all restrictions on development of our oil and gas resources. Obama says, “I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies…instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.” Truth – there is no currently viable alternative to oil and the government makes more on a gallon of gas than the oil companies do. Drill baby drill will produce more jobs and stimulate the economy faster than any “green jobs program.” That means developing the ANWR and opening coastal waters to offshore drilling. It is absolutely insane to buy oil from countries like Saudi Arabia, Iraq and Venezuela. They could care less about the environmental impacts of their operations or using the money to improve the lives of their people. Opponents argue that it takes years to bring a new well on line but waiting only makes the problem worse.
2) Completely revise our tax system. During his speech Obama said, “over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries…it makes no sense, and it has to change.” Truth – Congress and past presidents passed those tax laws and it is far past time to fix it. Our current policy of taxing businesses and “the rich” works against the creation of jobs. Government never has, and never will create true wealth building jobs. Only the private sector can do that. It is insane to believe that businesses actually pay any of the taxes assessed on them. Customers pay those taxes in higher prices. Obama is concerned about “hidden credit card fees.” But we need to be concerned about how hidden taxes impact our cost of living. And guess what happens when prices get to high – we end up importing goods from third world countries with lower wage rates and taxes. We need a fair tax that is paid by all citizens. One with few or no deductions so everyone directly feels the sting of government spending. Ultimately that will spur businesses to expand, innovate and create more jobs.
3) Instead of bailing out “too big to fail” banks and car companies we should let them fail. We would have been better off letting General Motors go through a Chapter 11 bankruptcy and broken it up into several smaller more competitive car companies built around the most successful brands. Same holds true for the big banks. Competition is the best regulator and encourages more innovation. If we are going to subsidize private industry we should subsidize small businesses through improved access to capital markets and lower interest rates on loans to expand. Small businesses have always been the engine of job growth. Big business generally supports more restrictive regulation and limits on competition.
President Obama said, “We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business.” I could not agree more, and historically we have been able to accomplish that. Not with regulation, fines and misguided tax policies but through encouragement of private sector initiatives.
Its time to recognize it has been our system of free enterprise capitalism that has created the most successful nation in the world. Unleashing the power of that system is the best road to economic recovery.