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Suppose you wanted to implement economic policies to increase employment, production, income and wealth in the U.S. How would you do that?
First, consider that the U.S. has a 20% market share of the $70 trillion growing global economic pie and that market share is declining every year.
Second, consider that emerging-market economies are rapidly increasing their contribution to the growing global pie as 1.5 billion to 2 billion people are moving up the economic ladder and into the middle class in China and India.
Companies are vying to provide products and services to those households over the next 20 years.
So the marginal source of global growth is in the emerging market economies over the next 20 years — not Japan or Western European countries where economic growth may average 1% a year.
U.S. economic growth might average 1.5% to 2% a year with the current mix of economic policies — not as bad as Japan or France but not much better.
For this global economy, the Obama economic policy portfolio is simply atrocious. U.S. companies are selling products and services to the global middle class — there's no question about that. The only question is where production and hiring are going to occur — inside the U.S. or outside the U.S.?
Answer: The Obama economic policy portfolio is shifting production and employment outside the U.S. as policies jack up costs for U.S. companies.
Unemployment is near 10%. American economic policy should be focused on helping companies be cost-competitive by creating a tax-friendly climate to encourage business formation, business expansion and capital formation in order to create U.S. jobs.
Instead, ObamaCare increases both annual costs and taxes on businesses and households which at the margin shifts production and employment outside the U.S. Tax rate increases in 2011 on capital and income also work to shift production and employment abroad.
The administration wants to regulate and tax business and households at every turn. President Obama's cap-and-trade tax proposal is another policy that would increase fossil fuel costs in the U.S. and shift production and employment out of the U.S. The proposed Dodd-Frank financial reform bill will increase costs and slow private- sector job growth.
Obamanomics may have had a chance of working in 1970, when the U.S. was in economic competition with high-cost economies in Western Europe. But his policy portfolio won't work in 2010 or at any point in the future. Emerging market economies adopted U.S. economic policies from the 1980s — deregulation and moving away from central planning and high costs to economies driven by competitive forces.
Thirty years ago, U.S. inflation was out of control, running at nearly 15% a year. The tough policies of Federal Reserve Board Chairman Paul Volcker cut the annual average increase in consumer prices to less than 3%, where his successor Alan Greenspan kept it during his nearly 19-year tenure. Low ...
We need "a warrior," not "a flower child." The anguished mother of an American soldier killed in Afghanistan said this about President Obama. She objects to the rules of engagement, which she feels caused her son's death. The recent Rolling Stone piece on the former Afghanistan commander, Gen. ...
When did "blue collar" become a dirty word in America? Right about the same time America gave up its position as the world's producer and instead became the world's most conspicuous consumer. That's not to bash free enterprise; we need to purchase and consume. But this cultural shift has created ...
With job creation in the U.S. basically at a standstill aside from some government hiring of temporary census workers, even after a trillion-plus in stimulus spending, Hillary Clinton's answer for more growth and more jobs is to remove even more money from the people who earned it and hand it over ...
The World Bank describes three waves of globalization. The first took place between 1870 and 1914, and the second from 1950 to 1980. The third and current wave began in 1980, arriving just in time to become a key driver of an extraordinary era for the U.S. economy. From 1982 to 2007, globalization ...
Posted By: zenga(1730) on 7/2/2010 | 1:12 AM ET
in fact, is there anything that obama has done that has actually benefited the country? the whole country, not just the welfare state, or the unions, or the banks he owes, or the eco-morons, etc. every single thing he has done has had a negative effect on the country. but then the country did elect a know-nothing, unexperienced, community organizer as President. what did we expect?
Posted By: dwdrury(1880) on 7/2/2010 | 12:08 AM ET
"Obama can easily change direction." When pigs fly. He's hellbent, like his hero FDR, to turn a recession into a monster depression, so he can look like the savior when war finally pulls us out of it. "Obamanomics may have had a chance of working in 1970..." Uh, no, Carter proved it didn't. I'll remind the Troll that the IRS recorded record revenues in 2005 (latest avail), proving Art Laffer and JFK correct. Reduced tax rates increase tax take.
Posted By: axo0gyp(430) on 7/1/2010 | 9:41 PM ET
This article is flat wrong. The healthcare bill will reduce costs for companies not increase them. The corporate tax rate may be 35% but Exxon made billions of dollars last year and did not pay a cent in taxes. The author wants a corporate welfare state where corporations do what they want, when they want ala BP and taxpayers foot the bill as republicans senators forced in the financial regulation bill.No criticism for the Bush admin policies which put us in this finacial hole either.
Posted By: jpdwn(915) on 7/1/2010 | 7:55 PM ET
Mr. Obama's economic policies are working out exactly as he expected. It's only a matter of who buys the snake oil pitch that it's benefiting US. With half the nation gobbling up identity politics with bashing Wall Street, BP and Big Oil, nasty health insurance companies, why shouldn't Obama ride the wave of ignorance and apathhy? Unfortunately, it's only one part of his "transformation" plan.
Posted By: gaylej(140) on 7/1/2010 | 7:35 PM ET
So let me get this straight. Every time Obama wants to spend a trillion dollars on something he is talking about spending 1.4% of all of the money IN THE ENTIRE WORLD. I think the average 10 year old can figure this one out. Why can't the United States Congress? The average unemployed voter figured it out quite a while ago.
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