'Why Business Despairs of Obama'
Mort Zuckerman, former Obama supporter now critic, lays out the problems for American business as long as Obama is president:
This weak record on growth is proving disastrous for ordinary Americans. Per capita income remains below its 2006 level, while wage-based incomes are declining. It is little surprise, then, that adjusting for inflation, retail sales last month contracted at nearly a 5 per cent annual pace, while the proportion of Americans living in poverty soared. This is a modern day depression, only this time soup lines have been replaced by unemployment cheques.
Facing these challenges, businesses are trying to enhance productivity, not create jobs. Polls show that business leaders are growing increasingly pessimistic. In the past six months a third of companies have delayed or cancelled plans for capital spending.
Of course, none of this was helped by a government that lost credibility by predicting that its recovery programmes would bring the jobless rate down and growth up. This was the beginning of the yawning credibility gap between the Obama's administration and business. The gap is being aggravated by Mr Obama's recent sharp turn to the left.
This resort to divisive populism - laying the blame on "fat cats" and pillorying the president's favourite villains - "millionaires and billionaires" - is exactly the wrong approach. It seeds the suspicion that the administration is more interested in campaigning and undermines the confidence that business needs if it is to invest in the face of new regulations, healthcare costs and an increased bureaucracy. Businesses sense that the administration no longer understands how this perceived hostility saps the animal spirits required for taking risks on expansions and start-ups.
Two things should leap out at you in the above excerpt; the fact that 1/3 of businesses have delayed or canceled plans to expand and the notion that there is a "credibility gap" between the government and business. The two problems are intimately connected. Business won't expand as long as they don't believe that the solutions being offered by the Obama administration will work to achieve any kind of growth.
As far as American business is concerned, Obama is a failed president. Zuckerman concludes:
The era of frugality is back. Today it is not a stock market crash or a crash in residential real estate but a crash in confidence that will constrain the effectiveness of public policy and have long-lasting impacts on the consumer and the economy. The historic American optimism has dramatically eroded. The great American dream is no longer a house in the suburbs. It is a secure job, but almost any job will do.