"Recovery Summer" Flops, Jobless Hit Hardest

It seems fitting that President Obama signed “financial reform” into law and the US Senate belatedly passed another extension of unemployment benefits on the same day. Because what the Democrats are doing in Washington D.C. is hurting economic recovery rather than helping foster growth. It’s tempting to compare their actions to those of BP in the Gulf; just as folks in the Gulf states’ are forced to subsist on checks from BP because of its negligence, the unemployed rely on checks from a federal government whose policies have kept them jobless. Business leaders are trying to communicate to the Obama White House that it’s the Obama/Pelosi/Reid agenda that’s the problem, not evil corporations who put greed and profits before people. They began their efforts last week.

Wall St. Journal

Business groups including the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Businesses will air a list of concerns about government policy at a “Jobs for America Summit” at the Chamber’s offices Wednesday.

The Chamber will issue an open letter to President Barack Obama asking that the administration cut taxes, act on pledges to expand export markets, and streamline government rules, according to a copy of the letter obtained by The Wall Street Journal.

On the regulatory front, “What we’re looking at here is a tsunami of regulations coming online slowly because of legislation that has either been enacted or legislation that people expect in some form will be enacted,” said Bruce Josten, the chamber’s chief lobbyist.

The letter points out that the Environmental Protection Agency is moving forward with 29 major economic rules (a major rule would have an impact on the economy of at least $100 million) and 173 major policy rules.

Legislation overhauling financial-markets regulation now nearing passage in Congress would create more than 350 rule makings, 47 studies and 74 reports.

“You can find in these numbers a principal reason why businesses are so reluctant to make investments,” the letter reads.

“Investments” is another way of saying “we won’t be hiring anytime soon”.These entreaties fell on deaf ears. So today business leaders took their concerns to Politico, which unlike that mouthpiece for capitalist dogs Journal, the White House views favorably.


Corporate executives counter that the market recovery began as a result of a bank bailout that predates Obama and that the bulk of corporate profits in recent quarters have come not from business expansion but from massive layoffs and cost cutting.

And they do not see a friendly environment for job creation ahead, citing a possible credit crunch and an exploding budget deficit saddled by more health care spending.

“What I think bothers businesspeople is, they feel like they have a multitude of new regulations to comply with, and now they have to hire compliance experts and lawyers and other cost-generating personnel rather than revenue-generating workers,” said Scott Shay, chairman of Signature Bank, which has $10 billion in assets and serves companies in the New York metro area.

“When the devil is in the details, when you are dealing with a lot of new regulation at a time when we desperately need to be [generating] revenue-creating jobs rather than cost-center jobs, it causes concern. I hear it time and time again: ‘Give us broad rules, but don’t micromanage us like this.’”


“There is still a great deal of anxiety over the demonization of business, and it is a serious problem” for Obama, said Mort Zuckerman, the billionaire chairman of Boston Properties and owner of the New York Daily News, who has long supported Democrats.

Executives “really feel there is a deliberate attempt, as a populist political measure, to blame the business world for all the problems we have been having, when, in reality, the housing bubble was provoked by Fannie Mae and Freddie Mac. And it wasn’t business or the public that lowered interest rates and created the credit bubble. It was the Federal Reserve.”

American companies are collectively sitting on $1.8 trillion and with unemployment at 9.5%, the White House needs a target for voters to blame, instead of Congressional Democrats. The problem is, it’s not only big business that is refusing to put out the Help Wanted signs.

From Reuters:

Small businesses grew more pessimistic about their economic outlook in June in the face of weak sales and political uncertainty, the National Federal of Independent Businesses said on Tuesday.

The NFIB’s monthly survey of members showed the small business optimism index fell by 3.2 points in June, dipping to 89, after posting several months of gains.

“Seventy percent of the decline this month resulted from a deterioration in the outlook for business conditions and real sales gains,” the NFIB survey concluded. The report is based on 805 responses to a random survey of NFIB members.

“The performance of the economy is mediocre at best, given the extent of the decline over the past two years,” the NFIB survey concluded. “Pent-up demand should be immense, but it is not triggering a rapid pickup in economic activity.”

Very few small businesses plan to create new jobs, according to respondents. The survey showed that only 10 percent of firms plan new hiring, that is down 4 points from May, the NFIB said. About 8 percent of firms plan to reduce their workforce, up one point from the previous month, the group said.

If you prefer visuals, this graph shows how the Obama/Pelosi/Reid agenda is redefining the term “jobless recovery”. Actually, they are doing their best to bring the terms “double-dip recession” and “stagflation” back into vogue.