Source: IRS Publication 1304, Table 1.1

Adjusted Gross Income, 2009	Average Federal Income Tax Rate
$10,000 to $15,000	6.80%
$15,000 to $20,000	6.60%
$20,000 to $25,000	8.70%
$25,000 to $30,000	9.70%
$30,000 to $40,000	10.00%
$40,000 to $50,000	10.60%
$50,000 to $75,000	11.60%
$75,000 to $100,000	12.30%
$100,000 to $200,000	16.30%
$200,000 to $500,000	24.60%
$500,000 to $1,000,000	28.80%
$1,000,000 to $1,500,000	29.40%
$1,500,000 to $2,000,000	29.60%
$2,000,000 to $5,000,000	29.70%
$5,000,000 to $10,000,000	29.10%
$10,000,000 or more	26.30%
Average	17.80%

Only 1,470 households in America with earnings of $1 million or more paid no federal income tax,³⁶ but that is surely because they took legal deductions including charitable donations. Obama, incidentally, has repeatedly called for severely curtailing the charitable deduction,³⁷ presumably to empower the government to play an even greater role in deciding who receives “philanthropic” redistributions.

At Osawatomie, Obama also falsely asserted that the tax cuts of 2001 and 2003 were “the most expensive tax cuts for the wealthy in history.” The Bush tax cuts were not only for the rich; they were progressive, with the lower and middle income brackets getting deeper cuts than the highest income brackets. Note that Obama did not denounce the Reagan tax cuts of the early eighties, which were not only bigger cuts, but entailed an unprogressive 25 percent cut for all income brackets; that’s because Obama can’t blame Reagan for the failure of his policies the way he blames Bush.

Numerous liberal commentators thought Obama had recovered some of his messianic magic at Osawatomie. “This was Obama’s best speech in a very, very long time, and it showed that he and his political people have finally figured out how to express the new, quasi-populist mood in this country in a way that sounds utterly majoritarian and unthreatening—and that backs the GOP into the corner of defending things that most Americans find indefensible,” raved the Daily Beast’s Michael Tomasky.³⁸ Ron Fournier of the National Journal commented, “President Obama’s ‘fair shot’ address Tuesday may be remembered as one of his best, a searing and historically poignant account of the greatest challenge of the American experiment: How do we give every citizen, rich or poor, a path to the good life?”³⁹

Yet despite their best hopes, many liberals realized that even if Obama recaptured some of his rhetorical rhythm with his pugilistic speech, he offered no new solutions. USA Today admitted that “Obama’s middle-class speech falls short of a cure,”⁴⁰ and the Washington Post conceded, “His policy prescriptions, at least so far, don’t match the gravity of the problem he describes.”⁴¹

BOEING: “RIDICULOUS” AND “LEGALLY FRIVOLOUS”

Having received orders for nearly a thousand 787 Dreamliner aircraft, Boeing Corporation began building a new plant in Charleston, South Carolina, to assemble the planes. The company poured millions of dollars into the facility, which was nearing completion in March 2011 when the National Labor Relations Board (NLRB) filed a complaint against Boeing alleging it had chosen to build the plant in South Carolina—a right-to-work state where employees cannot be forced to join a union or pay union dues—to retaliate against union employees in its plant in Everett, Washington.

The Everett workers had gone on strike at least five times since the 1970s, including twice in the last five years, causing Boeing to miss orders and costing it billions in lost business. Nevertheless, Boeing initially tried to locate the new plant in Washington, only opting for South Carolina after the International Association of Machinists refused to execute a long-term no-strike contract. South Carolina would not only solve that problem, it also had a friendlier business and tax climate.⁴²

This would be a new plant—a new investment—and no workers in Washington would lose their jobs because of it. That, apparently, was irrelevant to the Obama administration, which injected the federal government into a private business matter within a state jurisdiction, and in so doing, risked destroying job creation when it was sorely needed—all because it favors unions above American workers and the economy.

The White House tried to distance itself from the Boeing affair, attributing the decision solely to the NLRB. But South Carolina Governor Nikki Haley knew better, demanding an explanation why Obama “is allowing unelected bureaucrats to come in and do the unions’ dirty work on the backs of businesses.... It’s hurting the jobs in South Carolina and every other right-to-work state. He owes us an answer.”⁴³ The government’s case was “ridiculous” and “legally frivolous,” said Haley, who accused the administration of “bullying” and “kick[ing] around a private company, picking and choosing where it operates.”⁴⁴ Congressional Republicans weren’t buying Obama’s phony denials either, claiming the decision was a ploy to appeal to his union base.

Although the NLRB is an independent agency, Obama has helped to stack it with pro-union recess appointees, including Craig Becker, the associate general counsel of the Service Employees International Union, and acting NLRB general counsel and career NLRB attorney Lafe Solomon. “It is very important to President Obama because unions and their workers comprise a big piece of the volunteer core of the Democratic Party and a lot of money besides,” noted University of Virginia political science professor Larry Sabato. “The stronger unions are, the more workers and the more money they’re going to put into Obama’s campaign and all the Democratic campaigns.”

Numerous Senate and House Republicans wrote a letter to Obama demanding he withdraw Solomon’s nomination. They also pointed out that Obama’s militant, pro-union policies, including the Boeing incident, were contradicting his smiley-faced “win the future” campaign. “If the NLRB prevails, it will only encourage companies to make their investments in foreign nations, moving jobs and economic growth overseas,” they wrote. “America will not win the future if Washington penalizes workers in states that have discovered winning economic strategies.”⁴⁵

Senator Jim DeMint was outraged by the administration’s assault on Boeing, saying, “It’s clearly outside of the authority of this federal government to be threatening and bullying and trying to intimidate companies like Boeing who should have the freedom to locate their plants anywhere they want. It’s intimidation.”⁴⁶

After months of harassing the company and wasting untold sums of money, the NLRB dropped the case upon the request of the machinist union, which won major concessions from Boeing. Company spokesman Tim Neal declared, “We have maintained from the outset that the complaint was without merit and that the best course of action would be for it to be dropped. Today that happened. Boeing is grateful for the overwhelming support we received from across the country to vigorously contest this complaint and support the legitimate rights of businesses to make business decisions.”

But tenacious House Oversight Committee Chairman Darrell Issa, who had issued subpoenas to the NLRB for documents related to its Boeing complaint, was not going to go softly into the night. “NLRB’s decision to end its action against Boeing does not end the Oversight Committee’s investigation into the agency,” he announced. “NLRB’s record of rogue action and lack of transparency with the public and Congress in this case—and in others—has raised serious questions that remain unanswered.” Issa stated that he was pursuing the inquiry because “businesses must be free to conduct operations wherever in this country they can be most competitive.”⁴⁷

NLRB attorneys had stonewalled on the documents request, asserting they couldn’t release the papers because the matter was under judicial review. But now that the NLRB had dismissed the action, Issa said, he expected “full compliance from the NLRB.”⁴⁸ He realized that absent oversight and accountability, the administration would continue intimidating businesses on behalf of its union friends with impunity.

THE CARD CHECK AMBUSH

Where the Obama administration cannot empower unions legislatively, it is trying to do so administratively.

Congressional Democrats tried and failed to pass the “Employee Free Choice Act,” an Orwellian euphemism for a law (also called card check) that would intimidate workers into joining unions by eliminating secret ballot voting for unionization.⁴⁹ So the NLRB is trying to achieve the same result through a rule allowing for “ambush” elections. These would stack the deck in votes on union membership by giving employers only ten days to make their case to employees against forming a union.⁵⁰ Also by administrative fiat, as previously noted, the agency is considering the establishment of micro-unions, called “mini-unions,” that would balkanize companies and force employers to negotiate with numerous groups, which would both weaken their negotiating position and impose additional economic and manpower burdens.

In addition, the National Mediation Board is pursuing a rule change mandating that a vote for unionization would succeed on a simple majority of employees voting, whereas the old rule required an actual majority of all employees whether they voted or not. This change would greatly benefit Big Labor in its campaign to unionize Delta, the only remaining non-union holdout among the big airlines.

All these initiatives, as well as those documented earlier in this chapter, have helped Obama shore up his base; but they all, if put into effect, would have a chilling effect on job creation—and individual liberty.⁵¹

“THE NEXT THING YOU KNOW, OSHA’S AT YOUR DOOR”

The NLRB circulated an internal memorandum on May 10 outlining yet another scheme that would significantly enhance the power of unions over employers. The agency was seeking to change the existing rule that allows businesses to make major business decisions, such as relocating their facilities, without having to confer with the union, provided the changes aren’t implemented for the main purpose of reducing labor costs.

Companies are not required to negotiate with unions on their business strategies, but the memo recommends changing that. Richard Siegel, the NLRB’s associate general counsel, requested in the memo that the agency’s regional directors flag business-relocation cases. The board, he said, was considering “whether to propose a new standard” in such cases to compel businesses to produce detailed economic justifications for their decisions to relocate and allow unions to bargain on them as a condition of relocating.

Scholars James Sherk and Hans A. von Spakovsky argued that such a rule change would raise business costs enormously. Unions could force protracted negotiations and delay the employer’s decision to relocate (or otherwise) until the bargaining had reached an “impasse.” The authors concluded, “The NLRB’s goal is not just to prevent companies from investing in right-to-work states. The board apparently also wants to force employers to make unions ‘an equal partner in the running of the business enterprise.’”⁵²

Disturbingly, such a goal was neither contemplated nor required by the National Labor Relations Act and is clearly an administrative overreach in pursuit of a policy goal. But, said Sherk and von Spakovsky, “the board wants business decisions made to benefit unions, not the shareholders, owners and other employees of a business, or the overall economy. The Boeing charges are evidently just a first step toward that goal.”⁵³

There are copious other examples of the administration tilting the playing field in favor of unions. Don Todd, a former Department of Labor chief, says the White House is intent on shaming companies into unionizing. “In a worst-case scenario, your union organizer comes to you, offers you a deal to unionize, you say, ‘no,’ and the next thing you know, OSHA’s at your door,” he explains. “Then Wage and Hour show up, and they want to publicize it. They always find something wrong— it’s like with bed-checks in boot camp in the army.” Indeed, the administration’s solicitor of labor, M. Patricia Smith, reportedly engaged in similar corporate intimidation practices when she worked at New York’s Department of Labor, where she “set up a neighborhood watch-style system for monitoring and investigating wage and hour violations by companies.”⁵⁴

The administration has also marshaled the cooperation of the EPA to swell union ranks by tightening “green” emission standards to push independent truckers into the Teamsters Union, which happened to have donated more than $2 million to Democratic candidates in the 2008 and 2010 elections. The truckers could technically still operate under the old standards because the new ones were not yet formal rules, but if the major port authorities won’t admit them unless they meet the new green standards, they would be forced to join a union unless they could somehow afford to buy new green trucks.⁵⁵ There was little doubt the union was behind these stricter standards. Teamsters president James P. Hoffa wrote in a blog for the Huffington Post, “Right now, my union, environmental groups and L.A. Mayor Antonio Villaraigosa are battling industry polluters to protect a truck replacement program at the Port of Los Angeles that has reduced deadly emissions by close to 80 percent.”⁵⁶

“TECHNICAL” CHANGES THAT DON’T “MAKE ANY IMPACT”

Even as he piles more and more suffocating rules on American business, Obama pretends to recognize the depressing effect of excessive regulation. “Rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs,” he declared in early 2011.⁵⁷ Ostensibly to address these concerns, Obama went to great lengths to publicize a new initiative to streamline regulations and eliminate unneeded rules. In January 2011, he announced in the Wall Street Journal that he was signing an executive order requiring “that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth.” He was ordering “a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.”⁵⁸

Looking beneath the hype, however, Obama’s initiative wasn’t aimed at the real culprits. House Majority Leader Eric Cantor described it as “underwhelming” because it didn’t address major items such as the Dodd-Frank financial reform regulatory boondoggle, ObamaCare, or endless new environmental regulations.⁵⁹ Bill Kovacs of the U.S. Chamber of Commerce dismissed Obama’s changes as “technical,” the kinds that don’t “make any impact on the overall regulatory burdens that exist on the business community.”⁶⁰ He noted that meaningful regulatory reform would make the permitting process more transparent by identifying which permits are being delayed and for what reasons.⁶¹

Obama congratulated himself for identifying and rescinding certain onerous regulations as part of his review, but he didn’t explain what led to some of the more ludicrous rules in the first place. Should the administration be applauded for repealing the absurd EPA rule that defined milk as an “oil” that had to be treated as hazardous when spilled? Should it be praised for repealing a redundant rule forcing gas stations to maintain gas recovery systems?

Besides, as quickly as the administration was repealing some of these foolish rules, it was passing more and costlier ones. Moreover, certain important independent agencies were excluded from the initial review process, including the Federal Communications Commission, the Securities and Exchange Commission, and the Consumer Financial Protection Bureau.⁶²

“NO OTHER PRESIDENT HAS BURDENED BUSINESSES AND INDIVIDUALS” MORE

Notwithstanding the administration’s vaunted streamlining effort and claims by regulatory czar Cass Sunstein that annual regulatory costs “are not out of line by historical standards,”⁶³ regulatory costs have actually skyrocketed under Obama. Federal regulators during George W. Bush’s two terms added a shocking $60 billion in annual regulatory costs,⁶⁴ but the Obama administration through March 2011 had already added some $40 billion in annual costs,⁶⁵ more than doubling the Bush rate.⁶⁶ Fiscal year 2010 alone saw a $26.5 billion increase in new costs, setting an annual record.⁶⁷ Also in 2010, according to the nonpartisan Congressional Research Service, the Obama administration issued 100 major rules, the most since the Government Accountability Office began accumulating data in 1997.⁶⁸

A recent study by Heritage Foundation experts James Gattuso and Diane Katz unveils the administration’s regulatory zeal. During the first three years of the Obama administration, 106 new major federal regulations added more than $46 billion per year in new costs for Americans, and almost $11 billion in one-time implementation costs. This, say the experts, “is almost four times the number—and more than five times the cost—of the major regulations issued by George W. Bush during his first three years.” And again, hundreds more regulations are on the way with finance, healthcare, and various environmental rules.⁶⁹ In 2011 alone, even after Obama’s pledge to streamline the regulatory climate, his administration added thirty-two major new regulations, which increased annual regulatory costs by almost $10 billion and involved another $6.6 billion in one-time implementation costs.⁷⁰

Apart from comparisons between administrations, the size of the regulatory behemoth, in actual terms, is staggering. Today, the expected paperwork burden for businesses is 119.4 million hours per year.⁷¹ There are more than 281,000 people working in federal agencies, up 13 percent since 2008, while private-sector jobs fell by 5.6 percent, and 27 million Americans are now either unemployed, under-employed, or have taken themselves out of the job market altogether. Regulatory budgets during this period have ballooned by 16 percent. The Federal Register’s 80,000 pages swelled another 18 percent in 2010, and thousands of new rules await approval.⁷²

In 2011, through August, the administration proposed more than 340 regulations costing $65 billion to businesses that are struggling to create jobs.⁷³ In the month of July alone, the Obama administration added $9.5 billion in new regulatory costs with 229 proposed new rules and 379 finalized rules.⁷⁴ These figures, it should be noted, are typically underestimated, and don’t account for hundreds of regulations the administration did not review because they are “non-major” rules—ones believed unlikely to cost at least $100 million per year. These include fuel economy and emission standards for cars, light-duty trucks, and medium-duty passenger vehicles with an estimated cost of $10.8 billion per year, new light bulb energy standards to cost $700 million, and restrictions on “short sales” securities to cost $1.2 billion, as well as a raft of other expensive rules imposed by the Dodd-Frank financial bill.⁷⁵ As Heritage expert Diane Katz wrote, “No other president has burdened businesses and individuals with a higher number and larger cost of regulations in a comparable time period.”⁷⁶

“WHEN DOES IT END?”

On top of all the damaging regulations already approved during Obama’s short presidency, this nation is in for a regulatory tsunami once ObamaCare is fully implemented.⁷⁷ For example, ObamaCare will require major fast-food franchises to post calorie data on their menus and menu signs, an expensive, needless rule that will cost jobs. Domino’s Pizza chain might have to spend $5 million to include this information, which is already available on its website and on nutritional pamphlets available in its stores. The CEO of CKE Restaurants, which owns Hardee’s and Carl’s Jr., told the House Oversight Committee the rule could cost his company $1.5 million, an amount sufficient to build one and a half new restaurants.

Ironically, but par for the course for nanny-state interventions, the law will end up depriving the customer of information that is now accessible. Every Hardee’s and Carl’s Jr. store currently has wall posters that provide information on fat, sodium, cholesterol, protein, carbohydrate content, and other data. Those posters will probably have to be removed for space considerations once the new law kicks in.⁷⁸ So the law of unintended consequences (and that’s giving its authors the benefit of the doubt) will result in this rule not only addressing a non-existent problem, but creating a new one, e.g., for customers who might be measuring their fat, carb, or protein intake. It will also result in prohibitive costs each time a restaurant wants to change its menu items. “There are so many different things that I have to do right now that are just completely unnecessary that take away from our profits,” said Charlie Malament, owner of four Domino’s stores in Maryland. “When does it end? When does this stuff end? Just give a small business guy a break and let me take care of my customers and take care of my people.”⁷⁹

REGULATION NATION

In September 2011, Coca-Cola CEO Muhtar Kent made a remarkable statement. “In many respects, it is easier doing business in China, because of America’s antiquated tax structure and political gridlock,” he declared. “If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we’re disadvantaged. A Chinese or Swiss company can do whatever it wants with those funds [earned overseas]. When we want to bring them back, we are faced with a very large tax burden.”⁸⁰

Other CEOs share Kent’s dismay at the state of the U.S. business climate. Clarence Otis Jr., CEO of Darden Restaurants, the parent of Olive Garden, Red Lobster, and LongHorn Steakhouse, said that the mountains of new regulations make it “increasingly difficult for businesses to see why and where creating new jobs makes sense.” Otis said it was particularly difficult for businesses with low profit margins to survive in such an overregulated environment. In an op-ed for CNN, Otis argued that excessive regulations are killing job creation. He cited “regulatory mandates flowing from federal health care reform,” as well as mandated paid leave and employee meal and rest break provisions in the law. Otis said that neither his shareholders nor customers could “afford the cost of the unbridled increase in regulation we’re experiencing.” Businesses like his want to expand, he said, but “a regulatory ‘perfect storm’ is forming that causes even the most well-intentioned business leaders to pause.”⁸¹

The compliance costs for private-sector businesses are overwhelming. According to a Small Business Administration study, as of 2008, even before Obama’s regulatory blizzard, cumulative compliance costs of federal rules and regulations for American businesses were more than $1.75 trillion a year. Small businesses—those which can least afford it and which create most of America’s new jobs—were hardest hit. The SBA study found that small companies spend 36 percent more per employee for regulatory compliance costs than larger companies.⁸²

Similarly, the Fraser Institute, which ranks nations based on their comparative economic liberty, dropped the United States to tenth place, based on 2009 data, placing us, for the first time, behind Canada. “Much of this decline is a result of higher government spending and borrowing and lower scores for the legal structure and property rights components.”⁸³ This staggering $1.75 trillion annual cost of regulation is twice the amount of individual income taxes collected in the United States in 2010.⁸⁴

A group of Republican Congress members led by Congresswoman Cathy McMorris Rodgers released a striking chart showing the dramatic impact on jobs likely to stem from just five of the Obama administration’s proposed regulations.⁸⁵

SOURCES:

1. Utah AH Shurtleff, Congressional Testimony, 9/15/2011

2. Portland Cement Assoc., The Monitor, Flash Report, January 2011

3. EnergyFairness.org: Veritas Study, 6/20/211

4. Affordable Power Alliance Study, March 2011

5. CIBO Boiler MACT Jobs Study, 9/7/2011

It’s increasingly clear that one of the best things—if not the best thing—we can do to spark economic growth is to ease the regulatory burden on business. The Phoenix Center for Advanced Legal and Economic Public Policy Studies found that a mere 5 percent reduction in the regulatory budget, amounting to $2.8 billion, could result in some $75 billion in private-sector growth in the GDP and add 1.2 million jobs per year. The paper concluded that to eliminate just one regulator would grow the economy an average of $6.2 million and create 100 private sector jobs annually. On the other hand, for every million-dollar jump in regulatory budget costs, the economy can be expected to lose 420 private sector jobs. The paper’s authors thus suggest that Congress begin its budget cutting with the regulatory budget.⁸⁶

“THERE’S MORE THAN ONE WAY OF SKINNING THE CAT”

An incomprehensible amount of legislative power has been delegated to or usurped by the federal administrative monster controlling much of our country. The Constitution gives Congress legislative authority, but over the years it has increasingly abdicated its legislative duties through delegation to virtually unaccountable, independent administrative agencies (most of which are in the executive branch). The judicial branch bears some responsibility for this pattern of extra-constitutional delegation as well, having long since abdicated its role as a constitutional watchdog and having routinely approved such transfers of power.

As a result, Congress can delegate some its tough decisions to theoretically impartial agencies and avoid hard work and political heat. This transfer of power further removes the people from the governing process, as these agencies answer to no one except the courts, which in the absence of something akin to gross error, rubber stamp their decisions. This is one of the insidious ways that our brilliantly crafted constitutional republic has been subverted in favor of rule by a soulless administrative state.

A perfect example of this phenomenon is seen in an incident that occurred following the 2010 congressional elections, when the people resoundingly rejected Obama’s big government agenda. After the newly elected Republican majority said “no” to the administration’s relentless march toward socialism with such legislative nightmares as cap-and-trade, Team Obama just regrouped and negotiated an end-run through administrative rules and regulations. Obama broadcast his intentions by responding to the failure of cap-and-trade with the arrogant, defiant proclamation, “There’s more than one way of skinning the cat.”

This is part of a pattern seen throughout the administration: although the FCC is ostensibly independent, under the leadership of Obama-appointed directors, it seeks to regulate the internet when legislation fails; the EPA exerts ever more authority over wetlands on its own initiative; and the administration capriciously grants thousands of waivers to exempt chosen companies and other concerns from some of the onerous costs of ObamaCare—all without congressional authority, accountability, or oversight.

Congressional Republicans tried to rein in this regulatory madness. In December 2011, the House passed the Regulations from the Executive in Need of Scrutiny Act (REINS Act). The bill—which Obama has vowed to veto and which, in any case, is not expected to pass the Democrat-controlled Senate—would require that Congress approve every new “major” rule (any rule that the OMB determines will result in a $100 million annual effect on the economy) adopted by the executive branch.⁸⁷ This would make Congress more accountable and would certainly give the public more recourse than it has now, being subject to a pantheon of administrative agencies with little direct accountability. If Congress were required to approve every major administrative rule, the rule-makers would doubtless draft them less cavalierly. Senator Marco Rubio, a co-sponsor of the bill, said, “It’s time for Senate Democrats to stop standing in the way of another commonsense bill passed by the House of Representatives that will bring greater accountability and transparency to an archaic regulatory system that is actively impeding desperately needed private-sector job creation.”⁸⁸

FINED $15,000 FOR HIRING TOO MANY BROKERS

Peter Schiff, chief executive officer of Euro Pacific Capital, Inc., testified before the House Oversight and Government Reform Subcommittee on Regulator Affairs on his firsthand experience with the stifling impact of government regulations on hiring and economic growth. Regulations have “substantially increased the costs and risks associated with job creation,” Schiff explained. “Employers are subjected to all sorts of onerous regulations, taxes and legal liability.” He said that in his business, securities regulations have prohibited him from hiring brokers for more than three years. “I was even fined fifteen thousand dollars expressly for hiring too many brokers in 2008,” he said. “In the process I incurred more than $500,000 in legal bills to mitigate a more severe regulatory outcome as a result of hiring too many workers. I have also been prohibited from opening up additional offices. I had a major expansion plan that would have resulted in my creating hundreds of additional jobs. Regulations have forced me to put those jobs on hold.”⁸⁹

Oblivious to such testimony, Democratic Senate Majority Leader Harry Reid argued in a floor speech on November 15, 2011, that it’s a “myth” that regulations cost jobs. “Only a tiny fraction of layoffs” have anything at all to do with tighter regulation, says Reid, who also claims there isn’t “a single shred of evidence” that regulations cause major economic harm.⁹⁰

Reid was relying on data from the Bureau of Labor Statistics, which reported that for the third quarter of 2011, only 0.3 percent of respondents polled cited governmental regulations and intervention as the reason for mass layoffs—defined as fifty or more workers being laid off for thirty-one days or more. But Heritage scholar James Gattuso explains that just looking at mass layoffs can be misleading. While those kinds of layoffs get the most media attention, they are just a portion of the job-loss equation. Many layoffs, says Gattuso, involve fewer than fifty employees at a time; indeed most small businesses don’t even have fifty employees.

More important, as previously explained, job losses are not the main problem; a bigger one is the lack of job creation. Unemployment has remained high despite the fact that gross job losses have been relatively low; that’s because job creation has been very low. The administration can spout the false metric of “jobs saved” all it wants, but until the economy starts creating new jobs, unemployment will remain high. The surveys cited by Reid are thoroughly deceptive, since employers aren’t asked why they did not expand, only why they laid off employees.⁹¹

“DON’T ALWAYS BELIEVE WHAT YOU HEAR”

Obama’s EPA takes Reid’s argument one step further, claiming that increased regulations actually boost employment. The EPA wrote in February 2011 that “in periods of high unemployment, an increase in labor demand due to regulation may have a stimulative effect that results in a net increase in overall employment.”⁹²

This perverse belief comes from the top, for Obama is equally obtuse about the smothering effect of regulations. At a town hall meeting in Atkinson, Illinois, a farmer told him, “We enjoy growing corn and soybeans and we feel we do this as safely and efficiently as we possibly can, and mother nature has really challenged us this growing season.... Please don’t challenge us with more rules and regulations from Washington, D.C. that hinder us from doing that. We would prefer to start our day in a tractor cab or combine cab, rather than filling out forms and permits to do what we like to do.” After Obama asked him to cite a specific rule, the farmer discussed rumors of impending rules on noise pollution, dust pollution, and water runoff. Obama glibly responded, “Don’t always believe what you hear,” adding that he suspected if the farmer talked to the USDA, he’d find “that some of your fears are unfounded.” Without ever addressing the meat of the concern, Obama assured the farmer that he was very concerned about farming problems because he comes from a farm state.⁹³

Well, if the farmer’s fears were unfounded, how does Obama explain the EPA’s ludicrous proposed regulation on farm dust? The agency is seeking to revise the National Ambient Air Quality Standards (NAAQS) concerning “coarse particulate matter,” otherwise known as dust. The current NAAQS regulate such things as soot, and now it’s interested in that ubiquitous, evil substance, dirt.

The EPA’s own scientific panel hasn’t even determined that further regulation would be helpful, but that is no barrier to the agency, which apparently has little concern for the extra costs and time burdens this would place on farmers, resulting in higher food prices for the rest of us. Tightening the regulations could require farmers to undertake dust-control activities such as watering down dirt and gravel roads. Congresswoman Kristi Noem, to prevent or at least delay this nonsense, introduced the Farm Dust Regulation Prevention Act of 2011, which would bar the EPA from effectively revising the NAAQS for at least a year following passage of the act.⁹⁴ “The proposal to regulate farm dust is one of the most absurd ideas to come out of the EPA in a long time,” said Congressman Tom Cole, a co-sponsor of the bill. Cole insisted that farmers are fully capable of implementing common-sense measures to control their own dust and don’t need further job-killing regulations. None of these arguments made any impression on Obama, who threatened to veto the bill.⁹⁵

“BUREAUCRATS WHO KNOW NOTHING ABOUT RUNNING A BUSINESS”

The administration also heard an earful when White House chief of staff William M. Daley met with hundreds of manufacturing executives, who weren’t buying Daley’s claims that the administration was their friend. When Massachusetts manufacturing executive Doug Starrett claimed the administration was blocking construction on his company’s facilities in order to protect fish, the group of businessmen “erupted in applause.” Admitting that “sometimes you can’t defend the indefensible,” Daley conceded that the number of rules and regulations “that come out of agencies is overwhelming.”⁹⁶ Yet the administration never changes its approach, which is to meet with business representatives and give speeches, never meaningfully reducing the smothering constellation of regulations.

One businessman perfectly captured the administration’s obtuseness about the business world. Bernie Marcus, co-founder of Home Depot, said his company would never have succeeded had it launched today with these “impossible” regulations. “Every day,” he explained, “you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It’s become stifling.” Asked about Obama’s promise to streamline and eliminate regulations, he replied, “His speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones.” Asked if he could sit down with Obama and talk to him about job creation, he replied, “I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal arena. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face.”⁹⁷

Consumer Electronics Association President Gary Shapiro had equally sharp criticism for the administration’s regulatory straightjacket. “I challenge anyone, and no one’s ever answered me, to come up with a more anti-business administration,” said Shapiro. “They’re doing things that are very harmful to the economy. They’re not bad people. They just have no experience with business.” He argued that Obama is fostering a mindset that “business is evil,” and which tells businesses that “there’s not a sympathetic ear at all” in the White House. “It’s the ‘business is the enemy’ thinking. I don’t think that’s a healthy thing to do.”⁹⁸

While the administration is smothering the private sector, it is growing the public sector at an unprecedented rate. One study showed that between 2009 and 2010, the regulatory staff at federal agencies increased about 3 percent, with indications it would grow by another 4 percent in 2011. In fact, if the federal government’s regulatory operation were considered a business, it would be among the nation’s fifty largest revenue producers and the third largest employer.⁹⁹

“WE CAN CREATE A VIRTUOUS CYCLE”

Obama has been openly hostile to the pro-business U.S. Chamber of Commerce since early in his term.¹⁰⁰ Finally, presumably tired of being walked on, the Chamber rejected a last-minute request from White House adviser Valerie Jarrett to speak at a “Jobs for America Summit” in July 2010.¹⁰¹ The administration, it should be noted, had deliberately excluded the Chamber from its jobs summit at the end of 2009—a meeting that was a mere photo-op, and which excluded many free market advocates besides the Chamber.

In February 2011, in a supposed overture to the Chamber, Obama couldn’t help lecturing them, and railing against the free market again, about the heartlessness of its invisible hand. In a speech to the Chamber, he paraphrased John F. Kennedy, urging business leaders “to ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation.”

These remarks reiterated Obama’s economically illiterate belief that businesses can make expansion and hiring decisions in a vacuum, irrespective of demand or a company’s financial situation. To him, the profit motive is actually counterproductive to job creation because it increases overhead. He wholly discounts the economic reality that businesses cannot succeed if they make their hiring and expansion decisions for purely altruistic motives. As if anticipating his Osawatomie speech, he declared, “The benefits can’t just translate into greater profits and bonuses for those at the top. They should be shared by American workers, who need to know that expanding trade and opening markets will lift their standard of living as well as your bottom line. We cannot go back to the kind of economy—and culture—we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class.”¹⁰² In other words, “quit being so selfish and spread the wealth around, unlike you did during the Bush years.”

Further betraying his ignorance of economics, he told the group, “I want to encourage you to get in the game.... And as you hire, you know that more Americans working means more sales, greater demand, and higher profits for your companies. We can create a virtuous cycle”¹⁰³—as if by just hiring people regardless of the demand for them, presto chango, these companies can automatically make more sales and increase profits. Presumably, it’s only their lack of virtue and compassion that keeps them from hiring now.

That was not a mere throwaway argument for Obama. In Maryland a month earlier, he had given another pep talk to businesses, sharing his belief that a business’s decision to hire more workers and expand was purely a function of its own wishes, irrespective of external factors. “Now is the time to act,” he instructed his audience at a window manufacturer. “If you are planning or thinking about making investments sometime in the future, make those investments now, and you’re going to save money. And that will help us grow the economy. It will help you grow your business.”¹⁰⁴

HE STILL RECEIVES A FAILING GRADE IN BUSINESS

In his February speech to the Chamber of Congress, Obama told them, as he had declared many times before, that he had assembled a group of business leaders to meet and advise him about how to get the economy moving—as if all the intricacies of the complex American economy could be divined and set aright if our experts would just break into study groups. “I’ve asked Jeff Immelt of GE to lead a new council of business leaders and outside experts so that we’re getting the best advice on what you’re facing out there,” announced Obama. “I am confident that we can win the competition for new jobs and industries.... I know you love this country and want America to succeed just as badly as I do.”¹⁰⁵

Obama’s many half-hearted overtures to business didn’t yield much fruit. When he was stumping for his stimulus, he made a speech at Caterpillar boasting that the bill would directly prevent the company from having to lay off employees. Caterpillar CEO Jim Owens famously contradicted Obama as soon as he’d left the event. As to whether the bill would prevent layoffs, he said, “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again.”¹⁰⁶ More than two years later, Obama hadn’t done much to improve his reputation with that company. Its new CEO, Doug Oberhelman, maintains that Obama’s relations with business have improved, but he still receives a failing grade—a 5 or 6 out of 10.¹⁰⁷

“WE CANNOT ALLOW THE CORPORATE TAKEOVER OF OUR DEMOCRACY”

In his weekly radio and internet address of August 21, 2010, Obama couldn’t contain his frustration at his perceived business opponents who, along with the Supreme Court, reject his insistence on curtailing free speech through campaign finance reform legislation. He railed against “a flood of attack ads run by shadowy groups with harmless-sounding names. We don’t know who’s behind these ads and we don’t know who’s paying for them.” He blamed this situation on the Supreme Court’s ruling in the Citizens United case—“a decision that now allows big corporations to spend unlimited amounts of money to influence our elections. . . .” He further proclaimed, “We cannot allow the corporate takeover of our democracy.”

Obama then took an obligatory shot at Republicans who killed his proposed “Disclose Act,” which would have circumvented the Citizens United decision. “This can only mean that the leaders of the other party want to keep the public in the dark,” Obama insisted. “They don’t want you to know which interests are paying for the ads. The only people who don’t want to disclose the truth are people with something to hide.”¹⁰⁸

In fact, the Disclose Act, ostensibly designed to force most organizations to disclose their funding sources for political ads, was not about promoting transparency but, in the words of Senate Minority Leader Mitch McConnell, “about protecting incumbent Democrats from criticism ahead of November.” While masquerading as practitioners of transparency, the Democratic leadership brought the bill directly to the Senate floor “without hearings, without testimony, without studies, [and] without a [committee] markup.”¹⁰⁹

The following month, Obama ratcheted up his anti-corporate rhetoric at a Democratic fundraiser in Connecticut. Complaining again about Citizens United and Republican opposition to his Disclose Act, he declared, “We tried to fix this, but the leaders of the other party wouldn’t even allow it to come up for a vote. We are not about to allow a corporate takeover of our democracy.” Democrats admitted Obama’s rhetoric was aimed at picking up congressional seats in the November elections.¹¹⁰ But as the election results showed, Americans didn’t buy his assault on business.

PROVING A NEGATIVE

Amping up his attack, Obama suggested that in light of Citizens United, Republicans might even be receiving money via the Chamber of Commerce from “foreign-controlled” corporations.¹¹¹ Enraging Republicans as well as the Chamber, Obama’s charge was utterly misleading because the Supreme Court expressly indicated that its Citizens United ruling did not address foreign political contributions. As the Chamber’s top lobbyist, Bruce Josten, noted, “Federal law bans all foreign nationals from contributing either directly or indirectly to any candidate or political party ‘in connection with a federal, state, or local election.’”¹¹²

The Chamber’s intransigence only seemed to embolden Obama’s community organizing team. When CBS’s Bob Schieffer on Face the Nation pressed White House senior adviser David Axelrod for proof of the administration’s allegation that the Chamber was funneling foreign money to Republican campaigns, Axelrod doubled down on the accusation, even while essentially admitting he had no evidence. “Do you have any evidence that it’s not, Bob?” Axelrod demanded. “The fact is that the Chamber has asserted that, but they won’t release any information about where their campaign money is coming from. And that’s at the core of the problem.” Schieffer dismissively replied that the charge about foreign money “appears to be peanuts.” When Axelrod still refused to back off the allegation, Schieffer commented, “If the only charge three weeks into the election that the Democrats can make is that somehow this may or may not be foreign money coming into the campaign, is that the best you can do?”¹¹³

Clearly, this administration feels it can lodge scandalous charges without producing a scintilla of evidence, and unless the accused can prove a negative, it is presumed guilty. In fact, the Democratic National Committee produced a new ad accusing the Chamber of “benefitting from secret foreign money” and, along with the Republican Party, of “stealing our democracy.” Former RNC chairman Ed Gillespie, one of those singled out in the DNC ad, said the Democrats’ claim represented “an unbelievable mentality.”

But it wasn’t so much a “mentality” as a coordinated effort to accuse the Chamber and the GOP of undermining democracy with foreign assistance. Axelrod made this clear in his Face the Nation interview. “It’s never happened before that organizations are spending this kind of money,” he alleged. “And the American people need to ask, ‘Why is the oil industry, Wall Street and others spending this kind of money to defeat candidates and elect others in this sort of secretive way?’ You know, that is a threat to our democracy.”¹¹⁴

Obama repeated the allegations in two campaign speeches that same week. In Chicago he claimed to have a specific example. “Just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations,” he announced. “So groups that receive foreign money are spending huge sums to influence American elections.”¹¹⁵

Amazingly, even the liberal press refused to play along this time. “A closer examination shows that there is little evidence that what the chamber does in collecting overseas dues is improper or even unusual, according to both liberal and conservative election-law lawyers and campaign finance documents,” wrote the New York Times.¹¹⁶ But that smack-down did not stop Vice President Joe Biden from joining the charade. “I challenge the Chamber of Commerce to tell us how much of the money they’re investing is from foreign sources,” he declared. “I challenge them. If I’m wrong, I will stand corrected.” The Chamber responded in a press release, “We accept the vice president’s challenge here and now, and are happy to provide our answer.... Zero. As in, ‘Not a single cent.’”¹¹⁷

Of course, as they were hurling baseless charges at Republicans, the Democrats were silent on the copious amounts of foreign money funneled into their own campaigns over the years. In her blog, Michelle Malkin cited numerous examples, including convicted criminals and top Democratic fundraisers Norman Hsu and Hasan Nemazee, both connected with the Clintons; Obama’s commerce secretary and Buddhist temple cash collector Gary Locke; the Senate Democrats’ fundraising activities in Canada; and the Obama presidential campaign’s overt solicitation of foreign contributions on its website. The Associated Press concluded that Obama had raised at least $2 million abroad, dwarfing the $229,000 raised by John McCain’s campaign.¹¹⁸

In December 2010, the Los Angeles Times revealed a new element in the administration’s offensive against the Chamber of Commerce. Throughout 2010, the White House hosted business leaders, ostensibly to discuss policy, but in a number of those meetings urged the executives to lobby the Chamber to cancel TV spots targeted against ObamaCare. One business lobbyist accused Obama senior adviser Valerie Jarrett of urging executives to withdraw from the Chamber. Jarrett denied the charge, though an Apple spokeswoman, suspiciously, would neither confirm nor deny that the White House had asked it to leave the Chamber. And notably, when some major companies quit the Chamber over disagreements on its positions on global warming, Energy Secretary Steven Chu responded, “I think it’s wonderful.”¹¹⁹

TARGETING THE PRIVATE JET INDUSTRY: “WORDS HAVE CONSEQUENCES”

For a time, Obama’s crusade against business focused on scapegoating private jet owners. At a press conference in late June 2011, Obama mentioned “corporate jets” six times, as if they were a satanic emblem. “I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys,” he proclaimed, with his typical dash of class warfare.

With this attack, Obama deliberately conflated two tax issues and the groups of people they affect: recipients of the Bush tax “cuts” for those making $250,000 or more a year on the one hand, and recipients of the tax deduction for corporate jet purchases on the other. A person typically has to make far more than $250,000 a year to afford to buy and maintain a private jet, yet Obama falsely implied that those earning $250,000 were part of the same group who travel in private jets. His singling out private jet owners was also disingenuous considering that the tax break they enjoy is not much different in principle from the one extended to the wealthy buyers of certain luxury electric cars. Purchasers of $100,000 electric-powered Tesla sports cars, for example, were entitled to a $7,500 tax credit, yet they were spared Obama’s censure, as their credit is motivated by Obama’s pet green project.¹²⁰

Obama also failed to mention that the corporate jet tax break, “accelerated depreciation,” was reauthorized by his own stimulus package and in the Small Business Lending Fund Act, which he signed. Its purpose wasn’t to give the rich a gift, but to encourage purchases of expensive planes (and other large manufacturing products) to revitalize the ailing aviation industry and to boost the general economy. The tax incentive was first introduced to help the industry recover from the effects of the 9/11 attacks. An industry study found that the incentive contributed to a 43 percent increase in sales and another $2 billion in sales when it was implemented again in 2003.¹²¹

Obama’s rhetoric infuriated the jet industry. Aircraft Owners and Pilots Association President Craig Fuller said that Obama’s remarks had cast a pall over the entire aviation industry, deterring many potential buyers from acquiring planes. “The industry has suffered terribly in the last two and a half years and it has just started to recover,” said Fuller. “Most of the signs were starting to look good. We are so angry as an industry and we have all come together to try to bring a more fair and balanced description to the debate.” Similarly, the General Aviation Manufacturers Association and the International Association of Machinists and Aerospace Workers (IAMAW) sent the president an outraged letter. “Words have consequences and, in this industry, a few misguided words can put at risk even the ever-so-modest recovery we have experienced,” said IAMAW International President Tom Buffenbarger. “What this industry and its workforce requires is more time to recover, a chance to book more orders and the opportunity to recall more workers.”¹²²

James K. Coyne, head of the National Air Transportation Association, blasted Obama just a day after he had expediently visited a major American aircraft manufacturing plant for a photo-op to promote job growth. “It is perplexing why the president continues to bash an industry that is responsible for thousands of manufacturing, maintenance and service jobs,” said Coyne. “The president’s comments before a national audience could weaken consumer confidence in general aviation utilization at a time when economic indicators are demonstrating that the community is finally starting to recover from the recession.”¹²³

Similarly, Hawker Beechcraft CEO Bill Boisture denounced the administration’s “irresponsible” targeting of the private aircraft industry, claiming the assault, both in terms of user fees and fiscal proposals, had damaged customer confidence and contributed to as much as 25 percent of the industry’s layoffs and workforce reductions.¹²⁴

Hypocritically, the president often avails himself of the full perk of flying in the most private of public jets—Air Force One. He has reportedly flown Air Force One more than any other president in a comparable time period and, if waste were his concern, why do his wife, their family, and their entourage often fly in separate jets, greatly increasing the cost to taxpayers? Indeed, just as he was in high dudgeon over this tax break, the first lady was jetting to Aspen to raise funds from the very fat cats her husband was demonizing.¹²⁵

Nebraska Senator Mike Johanns warned that the president’s attacks on jet owners and manufacturers could have a chilling effect on the aviation industry—which provides some 1.2 million jobs and pours $150 billion into the economy every year. Indeed, while Obama wanted to create the impression he was targeting the wealthy, he was obviously indifferent to the fact that repealing the tax deduction and singling out the aviation industry could have wider repercussions. “[Obama] demonizes general aviation users,” noted Congressman Mike Pompeo. “He calls them corporate fat cat jet owners at every turn. But it’s not impacting the folks who use those as business tools. It’s impacting the people who build these airplanes. His rhetoric kills sales of American manufactured goods, and with them the jobs that are created when those airplanes are built.”¹²⁶

But liberals either don’t know or don’t care as much about the economy and the workers they purport to champion as they do the “righteous” cause of demonizing the “wealthy.” When they imposed a 10 percent luxury tax on yachts and other high-priced items a generation ago, they derisively scoffed at the potential negative consequences. Well, yacht owners reacted by purchasing their recreational assets offshore, creating a devastating impact on the boating industry in Florida and other coastal states, and destroying the jobs of some 25,000 workers in the industry. Government expenses for unemployment benefits for these workers greatly exceeded any revenues generated by the tax,¹²⁷ without even factoring in the lost revenues from potential purchases sabotaged by the tax.

And as Craig Fuller observed, “There are only 15,000 private jets in America. Even if they tax them all at $10 million apiece—of course his proposal does not come close—it wouldn’t make a dent in the deficit.”¹²⁸ This episode shows just how willing Obama is to harm the U.S. economy and U.S. business owners and workers for the sake of political gain and ideological fealty.

BANKS DON’T HAVE AN INHERENT RIGHT TO PROFIT

When the Bank of America decided to impose a $5 monthly fee on its debit card customers, President Obama appeared outraged. Always willing to weigh in on matters outside the purview of his office, he retorted that banks “don’t have some inherent right just to, you know, get a certain amount of profit.” This was reminiscent of a comment made by Jared Bernstein, Vice President Joe Biden’s chief economic adviser, about the Bush tax cuts—that “the millionaires and billionaires, frankly don’t need the extra cash.”¹²⁹ It obviously didn’t occur to Obama that the market could better determine the wisdom of this decision than he could. To Obama, the bank simply had no right to defray its administrative costs with fees. Rather it was surely gouging consumers—an “abuse of Wall Street,” as he described it.¹³⁰

Despite Obama’s demagoguery about evil “fat-cat” bankers and his full-throated endorsement of the Dodd-Frank financial regulatory scheme, the largest banks are bigger than they were when he took office and are nearing the level of profits they were making before the financial crisis of 2008.¹³¹ And speaking of fat-cat bankers and the executive bonuses they received that so incensed Obama, he was conspicuously silent about the enormous compensation packages paid to executives at the two largest bailout recipients—Fannie Mae and Freddie Mac.¹³²

“NOT PARTICULARLY INTERESTED IN BUSINESS”

Obama’s steadfast denials of his anti-business inclination fall flat in the face of so much evidence and so much rhetoric. In a September 2010 town hall meeting where he was hoping to shore up his pro-business credentials before the mid-term elections, he ran into a buzzsaw even from his own supporters. The Hill reported that the Business Cable Network had carefully selected the audience and that it was “largely deferential to Obama,” but questions from Obama voters “provided the most revealing glimpse yet into why the president and his Democratic allies are facing a potential disaster in November.” One disgruntled African-American woman exclaimed, “I’m exhausted of defending you, defending your administration, defending the mantle of change that I voted for, and deeply disappointed with where we are right now. I have been told that I voted for a man who said he was going to change things in a meaningful way for the middle class. I’m one of those people. And I’m waiting, sir. I don’t feel it yet.”¹³³

Other questioners challenged Obama on his anti-business hostility. Instead of dealing with the specifics, he defensively argued that he had turned the economy around so that businesses that were in trouble when he took office “now are profitable; the financial markets are stabilized.” Incredibly, despite his rhetoric, his pro-union actions against employers, his increased regulations, his finance reform bill, and his proposals to increase business taxes, Obama said, “I think that if you look at what we’ve done over the last two years, it’s very hard to find evidence of anything that we’ve done that is designed to squash business as opposed to promote business.”¹³⁴

It wasn’t just Obama voters who acknowledged his lack of sympathy for business. New York Mayor Michael Bloomberg, a liberal Republican and frequent Obama supporter, admitted that Obama was no close friend of business, and that anyone paying attention during the 2008 presidential campaign couldn’t have missed that. In urging support for Obama, Bloomberg ironically outed him as anti-business. “Obama never said he would be anything other than what he is now,” said Bloomberg. “He is a liberal guy, very pro-union, not particularly interested in business.” Somewhat incoherently, after noting that many Obama supporters had expected Obama to scale down his anti-business positions, Bloomberg said he had “more respect for him for not changing.”¹³⁵

STUNNING HYPOCRISY

Timothy P. Carney, columnist for the Washington Examiner, argues that the anti-business charge leveled against Obama isn’t precisely accurate. A better description, says Carney, is that he’s anti-free market, because he is more than happy to join forces with Big Business when it suits him. “His idea of being friendly to business,” writes Carney, “means more government subsidies and corporate-government cooperation.”¹³⁶

Obama indeed colludes with well-placed friends in Big Business. Take for example Jeff Immelt, head of General Electric. Despite all his populist bashing of big corporations, Obama appeared with Immelt in Schenectady to boast about GE’s imminent sale of a power plant in Samalkot, India. This was hardly a victory for the free market because, as Carney notes, “Obama’s Export-Import Bank is providing at least $400 million in subsidized financing to grease the skids.” Overall, Carney observes, GE “marches in sync with government, pocketing subsidies, profiting from regulation, and lobbying for more of both.”¹³⁷

Immelt, for his part, is just as committed to his government sugar-daddy. “The global economy, and capitalism, will be ‘reset’ in several important ways,” he wrote in a February 2009 letter to GE shareholders shortly after Obama’s inauguration. “The interaction between government and business will change forever. In a reset economy, the government will be a regulator, and also an industry policy champion, a financier, and a key partner.”¹³⁸

Immelt further explained this emerging Big Government – Big Business dynamic in an op-ed accepting his appointment as an adviser for the Obama administration. “We need a coordinated commitment among business, labor and government to expand our manufacturing base and increase exports,” he wrote. “Government should incentivize this investment in innovation.... Government can help business invest in our shared future.” Immelt no doubt earned a pat on the head from Obama when he stumped for his benefactor’s energy agenda: “A sound and competitive tax system and a partnership between business and government on education and innovation in areas where American can lead, such as clean energy, are essential to sustainable growth.”¹³⁹ Voila, business surrenders to the notion that business can’t succeed without government incentives, support, and cooperation.

Of course, there’s another reason Obama wants Big Business “partners” like Immelt: in exchange for government subsidies, tax credits, bailouts, and regulations that hurt their smaller competitors, they help advance Obama’s policy goals—a dynamic reminiscent of the corporatist economic policies underlying fascism.

Thus, GE is integrally involved in a number of industries promoted by Obama’s so-called “industrial policy.” For example, Immelt marches in lockstep with Obama’s green agenda. This may not be particularly profitable, but it keeps Immelt and his company in Obama’s good graces, and besides, any losses can potentially be offset, in part or in full, by Immelt getting his cut of the $100 billion-plus subsidies and tax credits the government provides for green technology.

Consider GE’s solar power efforts. Obama obviously prioritizes solar power, as shown in chapter eight, and so it was no surprise when GE announced in April 2011 that it would open the largest solar panel production concern in the United States. This complements GE’s position as America’s largest producer of wind turbines, which just happens to be another Obama hobbyhorse. ¹⁴⁰

The relationship, sadly, is even deeper. The Obama administration and GE both promote cap-and-trade; GE conveniently opened an embryonic stem-cell business after Obama provided subsidies for such research; and as Obama stumped for railway subsidies, GE hired Linda Daschle, wife of the former South Dakota senator and a strong ally of Obama as a rail lobbyist. “Look at any major Obama policy initiative—healthcare reform, climate-change regulation, embryonic stem-cell research, infrastructure stimulus, electrical transmission smart-grids—and you’ll find GE has set up shop, angling for a way to pocket government handouts, gain business through mandates, or profit from government regulation,” says the Cato Institute’s Daniel Ikenson.¹⁴¹

Obama’s choice of Immelt as his business BFF is stunningly hypocritical. In 2010, 60 percent of GE’s $14.2 billion profits were derived from overseas operations and the remaining $5.1 billion from its business in the United States. Moreover, GE paid precisely zero corporate taxes that year.¹⁴² Interestingly, we haven’t heard Obama complaining about GE or Immelt when he rails against millionaires and corporate greed. Nor did we hear Obama object to his buddy conducting so much of his business overseas, even though Obama often claims American jobs are his top priority.

“ANOTHER HEAD-FAKE IN THE DIRECTION OF CAPITALISM”

To try to defuse growing criticism from business, on January 31, 2011 Obama announced the “Startup America” initiative. Again, Obama revealed his unwavering belief in business’s dependence on government to succeed, and his naïveté about business and job creation, indicating that all that was required for new businesses to sprout was for him to give a rhetorical pep talk to America, telling prospective business creators to get off their duffs and jump into the market. The White House website reported, “Startup America is the White House initiative to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation.”¹⁴³

With the White House calling for the government and private sector to work in partnership on the project, “leaders in the private sector” obediently launched a “Startup America Partnership” to join “together to fuel innovative, high-growth U.S. startups.”¹⁴⁴ On its website the group stated, “For an entrepreneurial ecosystem to be successful and drive job growth, several elements must either exist or be developed.” Unsurprisingly, it listed among those elements the importance of “government serving as convener, but not the leader. Government must make a deep, long-term commitment to focus on new, young companies.” Another element listed was a commitment to “engage with local, state and federal government representatives as partners and conveners.” ¹⁴⁵

As the Heritage Foundation reported, “This ‘coordinated public/ private effort’ appears to be just another head-fake in the direction of capitalism with the intention of growing more government.” In analyzing the program’s goals, Heritage concluded that the entire effort is another opportunity for the government to pick more winners and losers. The government would “strengthen commercialization,” i.e., use taxpayer funds to take market share away from private banks and venture capitalists; it would “expand entrepreneurship education and mentorship programs that empower more Americans not just to get a job, but to create jobs” (which is fine in theory, but the government cannot create jobs, except perhaps those that consume more taxes than they generate); and it would “expand collaborations between large companies and start-ups,” which the government has no business doing.¹⁴⁶ In short, it’s just another government spending program that doesn’t increase demand for goods and services but merely redistributes demand and resources within the economy.

OBAMA’S WAR AGAINST SMALL BUSINESS

While Obama maintains a quid-pro-quo relationship with certain corporate cronies, his agenda has been devastating for small businesses, the primary drivers of job creation and economic growth. Small businesses create 70 percent of new jobs in America, but Obama has targeted them across the board, making many small business owners, as well as business and political analysts, wonder whether he’s doing so on purpose or through an ideologically based learning disability.

For example, Obama wants to remove the cap on FICA taxes, which would amount to an enormous tax increase on, among others, small business owners, and which would destroy many of those businesses and the jobs they provide. Obama forced through ObamaCare, which will increase taxes and other small business burdens. His financial regulation bill would make it much more difficult for small business owners to raise capital without jumping through government hoops. And finally, Obama has accommodated a climate that encourages employees to sue small businesses and others under various pretexts, just as he has steadfastly resisted even modest efforts at tort reform. All these factors and others are making it increasingly difficult for the entrepreneurial risk takers to create and expand businesses and increase employment.

In another potential blow to small business, the administration, in line with its continual focus on identity politics, got behind legislation that would require American businesses to provide the government information about the comparative salaries to employees based on sex, race, and national origin. The Paycheck Fairness Act, which has been re-introduced in Congress after previously passing the House but stalling in the Senate, includes expansive workplace rules, such as training female employees how to better negotiate pay and benefits, and also calls for the establishment of a database for American workers in both the public and private sectors.

The National Association of Manufacturers contends that while purporting to prevent race and gender discrimination, the bill could outlaw many benign, legitimate practices employers use to set employee pay rates.¹⁴⁷ The Heritage Foundation’s labor policy expert James Sherk claims the law “could transfer billions of dollars from employers to trial lawyers, bankrupting businesses and costing jobs.” Under the law, says Sherk, a woman earning less than a more experienced man could insist that her employer provide her training and thereafter pay her the same wage as her male counterpart. It would invite extensive lawsuits, including class action suits, and would result in the government injecting itself into the daily operations of businesses that it knows nothing about.¹⁴⁸

In 2012, apparently wanting to appear more small business- and corporate-friendly leading up to the election, Obama rhetorically proposed reducing the corporate tax rate from 35 percent to 28 percent, which sounded inviting on the surface. But he would exclude from this proposal specific industries he opposes, such as oil and gas, insurance, and small aircraft manufacturers, whose “loopholes” he would close. Meanwhile, he would lavish upon industries he favors—green energy concerns—various tax incentives and lower rates. The Heritage Foundation pointed out the absurdity of the administration, with this ostensible proposal to cut taxes, planning on raising $250 billion in revenues over ten years.¹⁴⁹

About a year after his deceptive announcement that he would streamline the regulatory process, Obama tried it again. In January 2012, in another effort to project himself as business-friendly, he pressed Congress to give him authority to consolidate six agencies that deal with trade and business development “to make it easier to do business in America.” As Investors Business Daily’s editors noted, his idea misses the point, which is that businesses aren’t complaining about duplication among multiple agencies, but about having to deal with the federal government at all.¹⁵⁰ This mirage would do nothing to relax the onerous regulatory structure Obama has exacerbated for the last three years.

As usual, Obama talks a good game about helping American business, but his policies betray an abiding ideological hostility to them; he seems to resent his inability to control them like an executive branch agency. To his chagrin, despite all his coercive regulations and his cultivation of numerous Big Business dependants, business still frequently acts independently of his will. Far too many businesses still won’t hire new workers just for his idea of the common good, and far too many won’t shift their production in accordance with his industrial planning. His frustration with this state of affairs fuels his attacks on business as well as on the GOP. But ultimately, simply lashing out isn’t enough to achieve the fundamental transformation he wants to effect. He’ll need to exert even more control over the economy to do that—and unhindered by election concerns, that’s what Americans can expect if he wins another term in office.

“AT HIS CORE, ANTI-BUSINESS”

“EVERYBODY’S AFRAID OF THE GOVERNMENT”

THE OSAWATOMIE SPEECH

THE “BUFFETT RULE”