Tuesday, October 19, 2010

Bob Herbert misses the big issue 

In his morning column, Bob Herbert does a decent job, for Bob Herbert, of explaining how Barack Obama has blown it.

Barack Obama seems to think he’s done a pretty terrific job as president, but maybe he hasn’t trumpeted his accomplishments effectively enough.

He told The Times’s Peter Baker, in an interview for the Sunday magazine, “Given how much stuff was coming at us, we probably spent much more time trying to get the policy right than trying to get the politics right. There is probably a perverse pride in my administration — and I take responsibility for this; this was blowing from the top — that we were going to do the right thing, even if short-term it was unpopular.”

This assessment by the president is debatable, but it won’t be among the things that are front and center in the minds of voters as the November elections approach. The problem for Mr. Obama and the Democrats is the widespread sense among anxiety-riddled Americans that the country is still in very bad shape and headed in the wrong direction....

What ordinary voters see is an economy that is not working for them and an increasingly dismal outlook for their children. From that perspective, the enormous budget deficits don’t seem to be providing much of a tangible return.

All true, and there is more where that came from, including a sucker punch on health care reform. And that from the Grey Lady's most reliable liberal.

There is, however, another reason for the "increasingly dismal outlook for [our] children." Our future depends on growth, which means, effectively, the growth of business. The liberal Democrats who dominate the federal government in the Congress, the White House, and the executive branch instinctively and reflexively oppose the growth of business and even when they claim to favor it they put it far down their list of priorities.

So, according to Democrats, already globally high corporate taxes should be increased, rather than decreased, in the interest of "fairness" without regard to the impact on investment.

In the regulation of the financial system, "protection of the consumer" by an all-powerful regulatory agency beyond the reach of not only voters but the Congress is more important than clear rules for bankers.

The incredibly burdensome and expensive requirement that businesses issue 1099s to virtually everybody they buy something from so that the feds can capture the information necessary for a future VAT is more important than, well, businesses being able to buy stuff -- actually economic activity! -- without an expensive bureaucratic process.

An unwillingness to move forward with pending free trade agreements to protect American unions is more important than the growth of trade and the many more diffuse jobs that will create.

Threatened and actual new subsidies and regulation in favor of labor unions and new protections for individual employees are more important than lowering barriers to employment.

Threatening massive new regulation of the entire energy sector because of "climate change" is more important than new power plant construction.

Banning new offshore oil and gas exploration is more important than, well, new offshore oil and gas exploration.

Distracting and frankly exhausting the executives and directors of public companies with incredibly complex new rules around corporate governance designed to empower government employee pension funds is more important than the actual management and oversight of the underlying business.

The Securities and Exchange Commission and the Financial Accounting Standards Board pushing massive changes in American accounting rules in order to "converge" with international rules and some theoretical purity is more important than consistency of financial statements over time.

Theoretical purity of internal controls and other process is more important than access to low-cost equity capital for new companies that want to raise money in the public markets.

Threatening a massive re-regulation of the telecommunications industry in the name of "net neutrality" is more important than the regulatory certainty necessary for new investment.

And, to mention two items I know more than a little something about...

Massive new regulatory barriers to the commercialization of new medical devices -- far in excess of the requirements of any socialist European regulatory state -- are more important than the new jobs and benefits to surgeons and patients attributable to those devices.

The taxation on the revenues -- not profits, but revenues -- of medical device companies is a massive new barrier to business formation in a formerly dynamic sector with both a favorable balance of trade and hundreds of thousands of high paying jobs.

Notice that I did not even mention health care "reform." That's because those few paragraphs above were just the tip of the iceberg.

There are, of course, arguments that any of these regulatory initiatives might be necessary, but the cumulative impact is devastating and does not even take in to account the very real depressive impact of ten years of political attacks on business by both parties going back to the bursting of the NASDAQ and telecom bubbles at the end of the Clinton administration.

Americans who work in actual businesses -- a decreasing percentage of the population, to be sure, but still the group that carries everybody else -- at virtually every level can see and feel the impact of the resurgence of regulatory and political attacks on enterprise and risk. While they may understand that some of it is necessary, they also know that we cannot, as a country, flourish if we always elevate other values above economic growth. And that is precisely what the Democratic regime in Washington has done.


By Anonymous Anonymous, at Tue Oct 19, 12:32:00 PM:

I'm curious about something: if your business were HQ'd in Geneva instead of Princeton, what would the financial impact be on the company? What about your ability to bring new product to market? Would there be meaningful changes in prospects or returns if you were in Switzerland, instead of NJ?  

By Anonymous feeblemind, at Tue Oct 19, 01:39:00 PM:

It is an old problem. People that know nothing about running a business having the power to regulate those that do.  

By Anonymous Dan D, at Tue Oct 19, 03:38:00 PM:

Oh no, a new commission? Fair Accounting Standards Board, is that one step below the Pretty Darn Good Accounting Standards Board?

I think the recent trends toward business bashing - and you by no means covered all that is going on in your list - is a result of the "prosperity bubble" economy typified by the tech bubble of a decade ago and the more recent real estate bubble.

When people feel prosperous they get bored and lose touch with the sources of real prosperity: hard work, agriculture, building and mining, manufacturing, innovation, and just leading responsible and productive lives. So they focus on the touchy-feelie stuff, soft academics, playing with their electronic toys, government nanny stuff, until it all comes crashing down on everybody's heads. Hard times for all.

The marijuana legalization and medical dispensing craze is another visible symptom of too many people who haven't faced enough hard times to understand how fragile our social and economic condition really is when fewer people want to be productive and more people want the pleasures and benefits of productivity.  

By Anonymous Anonymous, at Tue Oct 19, 03:47:00 PM:

Unless something has changed since I retired, it is the Financial Accounting Standards Board.  

By Blogger TigerHawk, at Tue Oct 19, 04:14:00 PM:

Of course it is! Thank you. I'm getting old, and my readers are seeing the cognitive defects emerge before their eyes.  

By Anonymous Ignoramus, at Tue Oct 19, 04:46:00 PM:

Do we have to read The New York Times the way that Russians used to have read Pravda?

Between the lines and in sum, Bob Herbert is criticizing what Obama recently said in the NYT's Sunday Magazine. It's watered down "tea" -- but coming from anywhere in The Times it's a tell. Herbert is saying it should have been Jobs ... Jobs ... Jobs. No shit.

So there's some dissent brewing inside The Times.  

By Blogger Bomber Girl, at Tue Oct 19, 06:31:00 PM:

Ignoramus, they are probably worried about their JOBS. Times are tough. No pun intended.  

By Blogger Stephen, at Tue Oct 19, 08:57:00 PM:

The question is given that liberals are too incomptent to run a lemonade stand, should they ever have the levers of power?  

By Blogger Escort81, at Tue Oct 19, 09:57:00 PM:

I sometimes wonder what percentage of Americans believe it is proper for a business to make a fair profit -- any profit -- or whether the concept is inherently exploitative and morally wrong. I think most Americans think profit is fine, and even most progressives recognize that they need something to tax, but there seems to be a growing percentage of people who take a dim view of an organization which has receipts well in excess of disbursements.  

By Anonymous Pah-Mah to the right, at Tue Oct 19, 10:16:00 PM:

Echoes of our discussions of Atlas Shrugged (can't figure out how to underline, sorry for transgression) as teenagers echoing in my mind, TH. Working very hard to bring back sanity and common sense to our country.  

By Anonymous JohnnyL, at Wed Oct 20, 09:38:00 AM:

"I sometimes wonder what percentage of Americans believe it is proper for a business to make a fair profit -- any profit -- or whether the concept is inherently exploitative and morally wrong."

In Connecticut you would think that the Democrats believe that running a business to make a profit and the decisions you have to make are a problem. Blumenthal is saying McMahon is putting profits before people when she had to reduce staff at WWE. In the governors race Malloy is attacking Foley for closing down a mill. Just this morning is the local paper a letter to the editor stated that the writer was voting the straight Dem line because they put people before profits. Wonder how she thinks all those programs get paid for?  

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