When President Obama holds back approval of the Keystone pipeline, for the umpteenth time, it’s bad enough that he’s politically pandering to Tom Steyer, the hedge-fund billionaire and manic radical opponent of fossil fuels. If he gives in to Steyer by blocking the pipeline, Steyer gives $100 million to Democratic candidates this fall.
Obama’s transparent political cynicism is incredible. But it’s more than that. It shows his disregard for jobs and economic growth for blue-collar union workers who used to be Democrats. It shows his utter disregard for our loyal Canadian ally up north. And it sends the wrong signal to Vladimir Putin, who probably believes the U.S. will not undermine Russia with energy independence and oil and gas exports while Obama is in office.
But perhaps most of all, Obama’s Keystone veto sends a message to American business that he just doesn’t care.
For as long as he’s been in the Oval Office, Obama rarely has had anything good to say about business. Instead he talks about inequality, redistribution, taxing the rich, and re-regulation. Remember “you didn’t build that business”? That sums him up right there.
And you know what? Businesses listen to what presidents say. They get the message. From day one, this administration has been anti-business. So instead of making long-term investments that would create tens of thousands of jobs, companies have held onto their profits and gone into a deep crouch. Or they’ve stashed their money overseas.
It’s understandable. President Obama has never been serious about corporate tax reform and reduction. But he has been serious about his desire to punish companies with a huge tax bill.
American firms are locked in this non-investment crouch because they can’t be sure which regulatory or tax burden is coming next. The Wall Street Journal recently reported that “the recovery is proving to be one of the most lackluster in modern times.” A negative and fearful business psychology is a key reason why.
Obama has never figured out that business, not government, is the heart of the economy. Businesses create the jobs and incomes that deliver family prosperity. And new and existing firms need capital investment for start-ups or expansions. It’s a process that requires confidence. Instead we have uncertainty.
And you know what? This could all be changed.
Let’s go back to a different period: 1982 to 2000. Ronald Reagan and Bill Clinton were pro-business, and they said so often. Reagan did so from day one; Clinton did so after his election shellacking in 1994.
Some numbers? From 1982 to 2000, real annual GDP growth averaged 3.8 percent, 44 million new jobs were created, and the stock market increased 900 percent.
Now let’s bring in a polar-opposite cycle. I’ll make this bipartisan, covering the George W. Bush and Barack Obama years. The results? From 2000 to 2013, real annual GDP growth was 1.8 percent, 5.5 million new jobs were created, and stocks went up only 44 percent.
Why the huge difference between the cycles? Good policies versus bad policies. Encouraging business and entrepreneurship rather than discouraging it.
Unfortunately, President Bush presided over the collapse of the dollar, a skyrocketing gold price and a lack of monetary rules that channeled into a housing and commodity bubble that decimated the economy and financial sector.
As for Obama, I’ve mentioned some of his mistakes. But let me emphasize the economically destructive impact of Obamacare. With its costly mandates that jack up premiums and reduce profits, it has thrown a wet blanket over hiring the 51st worker or allowing for the 30th hour worked. Under Obama, the size and scope of government has greatly enlarged. That’s anti-growth.
In the Reagan-Clinton prosperity cycle, the size and scope of government was substantially reduced. A pro-growth measure. There was major tax reform and reduction, free-trade expansion, deregulation, large-scale federal-spending restraint, welfare reform, Social Security reform and monetary rules that vanquished inflation and delivered a strong King Dollar and a collapsing gold price. All pro-growth. All encouragements to business confidence and psychology.
We can get back to the near 4 percent growth of the Reagan-Clinton cycle. That’s what elections are for — to change policy. And part of the policy change must be a new pro-growth, pro-business optimism that sends the right signals to large and small firms, entrepreneurs, blue-collar workers, families and the rest of the world.
Remember this: When America gets it right at home, its international influence and prestige will return. Meanwhile, most of the rest of the world will get their stories right by following America’s lead. Prosperity at home is essential to peace and freedom abroad.
Of course we can do better. That’s what the ’80s and ’90s proved. That’s why the midterm elections are so important.