Wednesday, December 7, 2011


Under President Obama's Disemployment doctrine unemployment has almost doubled compared to the Clinton and George W. Bush administrations

America’s ‘Obama years’ ushered in a new economic doctrine best described as the "Disemployment doctrine", a dubious honor but a reality nonetheless.

President Obama’s Disemployment doctrine is the incarnation of state sponsored legislative and regulatory controls designed to resemble those of Western Europe’s welfare state structure, with resultant employment solely dependent on these influences. As the EU-27 languishes at a 9.3% unemployment rate over the last three years under mostly socialist driven business regulatory policies, President Obama has followed the EU’s governmental model causing Americans to struggle under similar unemployment rates.

The Disemployment doctrine’s elevator speech can be summarized simply as the installation of governmental mechanisms to control the rise and fall of employment. The doctrine is patently opposed to the classical liberal’s free market economic doctrine, wherein the free market system is permitted to operate with minimal government oversight, meddling, cost and regulatory controls. As a consequence economic wealth, growth and job opportunities flourish under, as Adam Smith coined, the self-regulating “invisible hand” of the marketplace.

The President’s doctrine is not an unfortunate accident of circumstances, but a purposeful attempt to ensure governmental control over America’s employment environment. One could characterize it as nascent socialism, i.e., centralized state planning expressed through a systemized and deliberate effort of regulatory overreach to coerce and control private business operations and production. This massive state influence over the business sector then results in state controlled economic growth, prosperity and employment to the detriment of society.

The President’s policies animate Bastiat’s notion of "legal plunder", where the economic interests of the public are excessively intertwined with the state, and Joseph Schumpeter’s definition of socialism as "an institutional pattern in which control over the means of production itself is vested with a central authority ... in which, as a matter of principle, the economic affairs of society belong to the public and not the private sphere".

Over the past three years President Obama has supported punitive polices, installed onerous business regulations, and championed major legislative efforts in the name of his doctrine, resulting in anemic economic growth and pervasive disemployment. According the Center for Individual Freedom, ever since the federal government started tracking quarterly GDP growth in 1947 not one President has failed to enjoy a quarter of at least 4% GDP growth, but it now appears that President Obama may be the first in history; hardly a presidential recipe for creating a positive business environment and full employment.

The President has introduced a number of legislative and regulatory policies that have catalyzed his doctrine, contributing to the ever-growing federal size and scope of government. Many of these constitute new structural pillars of leviathonic regulatory bodies such as ObamaCare and Dodd/Frank, adding to spiraling governmental costs and sapping precious business resources in the name of government compliance. There are too many to name in totality, but let us count some of the ways to illustrate the method to his madness.

Overregulation: This element of the Presidents’ Disemployment doctrine is the most egregious, and its impetus is purely politically partisan on behalf of the Obama administration. The Obama administration costs businesses an astonishing $1.7 trillion annually in regulatory costs that detracts from utilizing those funds for innovation and growth and is, at the end of the day, just passed on to consumers. Additionally, the Obama administration has changed 76% of federal regulations in just three years, versus the Bush administration changing 64% in eight years. Rep. Darrell Issa (R-CA), Chairman of the House Committee on Oversight and Government Reform, said, "The federal regulatory process is broken, being manipulated and exploited in ways that benefit allies of the Obama Administration such as environmental groups, trial lawyers, and unions".

ObamaStimulus: the CBO recently reported out that the $825 billion ObamaStimulus was very non-stimulating. The report stated it sustained as few as 700,000 jobs at its peak and over the long run it will actually be a net drag on the economy. The CBO also stated that the ObamaStimulus “crowds out” private investment and will reduce output slightly in the long run by between 0 and 0.2 percent after 2016.” Furthermore the ObamaStimulus to date has spent approximately $666 billion and, according to the Obama administration, saved or created 2.4 million jobs. This is a cost of $278,000/job, an expensive government giveaway program.

ObamaCare: this 2,700 page monstrosity is now the law of land and, akin to socialist central planning philosophies, authorizes the Secretary of Health and Human Services to dictate each and every American’s health care destiny. This legislative abomination requires an employer mandate for providing health insurance coverage for all full time employees which serves to hurt job opportunities for less skilled workers, unless their production value exceeds their wages, payroll taxes, and now, their ObamaCare costs. Additionally ObamaCare will encourage employers to hire more part-time workers due to ObamaCare’s full-time employee individual mandate.

Environmental Protection Agency: The President has placed the EPA at the epicenter of his Disemployment doctrine’s mission. The EPA is the largest bureaucratic governmental agency with 18,000 employees and warrants a special call out since it has, by many measures, been the largest regulatory impediment to business production and job growth. Sen. James Inhofe (R-Okla.), ranking Member of the Senate Committee on Environment and Public Works, has summed up the Obama administration’s use of the EPA by stating, "In the past two years, EPA has issued an unprecedented number of rules - known as the "EPA train wreck" - which are slowing the economy and killing jobs. Taken together, these regulations could cost upwards of a trillion dollars, destroy hundreds of thousands of jobs, and significantly raise energy prices for families, businesses, and farmers. In fact, from farm dust to puddles of water on the road, there are few aspects of American life EPA is not planning to regulate, and it is American families who will pay the price.”

Dodd/Frank: this Obama led regulatory fiasco has 2,300 pages of unintelligible instructions to micro manage the financial services industry. This will ultimately translate into banks charging higher rates on loans to recoup their costs and adding more fees to investors. This horrendous piece of legislation has struck fear into the hearts of the banking industry due to its inchoate regulatory maze, which will lead to fewer small business loans and less hiring. “Each new regulation … adds another layer of complexity and cost of doing business. The Dodd-Frank Act will add an additional, enormous burden, has stimulated an environment of uncertainty, and has added new risks that will inevitably translate into fewer loans to small businesses,” says Thomas Boyle, vice chairman at State Bank of Countryside, Countryside, Ill.

These are institutional inputs into the President’s Disemployment doctrine, but other ad hoc decisions by the President to implement his doctrine and frustrate employment deserve honorable mention. Of note are two prime examples. First, President Obama’s decision to capitulate to environmental special interests and delay the scientifically proven safe Keystone XL pipeline project. This has cost 20,000 immediate and 118,000 spin-off jobs. Second, the President’s NLRB, in central planning fashion, refused to allow Boeing to hire employees in ‘right-to-work state’ South Carolina after Boeing constructed a $750 million plant there to build its Dreamliner plane. The NLRB is suing Boeing to relocate the production facilities to union-controlled Washington State, but Boeing is contesting this since it wants to avert union strikes that would delay Dreamliner production. This is clearly a payola ploy on the part of the President for his union cronies and, in the process, central plan Boeing’s business activities, cause business disruption, waste and kill employment in South Carolina.

Some have accused President Obama of reneging on his campaign promise of unprecedented transparency in his administration. On the contrary, the President’s Disemployment doctrine has been crystal clear as to strategy, tactics and results. No, it’s not the President’s transparency that is lacking; it’s the American jobs that are absent.

No comments: