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Tulare Chamber of Commerce

The Labor Department recently released June employment figures, and they were even worse than expected; it was the worst quarter for job creation in nearly two years, with unemployment topping 8 percent for the 41^st straight month.

The Obama administration has valiantly tried to put a positive spin on the ailing economy. We’re continually told that recovery is just around the corner, that things would be much worse if not for the president’s trillion-dollar stimulus and other policies, and that the entire mess is Bush’s fault anyway – this coming nearly four years into Obama’s presidency.   

The source of our economic malaise is no mystery, and neither are the pro-growth reforms that would improve the situation. But the Obama administration and its congressional allies are ideologically vested in the current policies. To change tact now would be to admit that their Keynesian pipedream of trying to spend our way into prosperity has failed. Since the current policy is inadequate and the obvious alternative is rejected out of hand, the administration is left with one option – it believes every disappointing jobs report proves that the government needs to spend even more money it doesn’t have and to intervene further in the economy.

A major reason for our sluggish job growth is that people are afraid to start businesses, and existing businesses are afraid to expand. The government has created far too much uncertainty, pushing up the risk of investing money that instead sits on the sidelines. Why would small business owners risk their own assets when they don’t know if Obama will succeed in driving up their income tax rates next year? What business wants to hire new employees when it’s still unclear how it will be affected by the galaxy of new taxes and mandates included in ObamaCare?   

Businesses aren’t asking for much – just a clear and fair regulatory and tax environment. I’d like them to get it. In an ideal world, this would mean repealing ObamaCare, overhauling and simplifying the entire tax code, restoring an adequate water supply to farmers, and removing bureaucratic and regulatory obstacles to building new nuclear power plants and to oil and gas drilling. In the long run, it would mean reforming entitlements, whose unfunded liabilities threaten the entire economy and every business in it.

Many of these steps, of course, are not possible right now, considering the current political make-up of the Senate and the administration. But that doesn’t mean there’s nothing we can do. One proposal currently developing in Congress, known as the American Business Competitiveness Act, would kick-start the economy by reducing taxes on all businesses, no matter how they’re organized, to 25 percent, and by allowing 100 percent expensing, meaning firms will deduct their full investment costs from their current year income. This kind of pro-growth reform would help businesses overcome their fear of investing and expanding by rewarding those activities with lower tax rates. 

The job market is terrible and the future outlook is grim – extravagant high-speed rail boondoggles will not change that. Instead of insisting Washington knows best, the government needs to listen to the valid concerns voiced by men and women who actually create jobs. More than anything, it needs to learn that the government doesn’t generate jobs – businesses do.