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The Obama Administration – Bad For Business

There has been much discussion regarding the story that broke this week about Obama being anti-business. This was revealed in a Bloomberg poll that clearly shows that the majority of Americans do not trust Obama to lead us out of this financial crisis. The result is that many, if not most, companies have all but ceased to take risks and pursue innovation.

So what are the reasons that the majority view the Obama administration as “bad for business”. Well first, no one knows where to put their money and it appears that the secret to success during this administration’s regime is to pick an industry or business segment that Obama does not hate. Until then, the business community has to battle through the “FUD” factor – fear, uncertainty and doubt – regarding the true picture of the business environment.

Let’s take a look at some of the specific examples of why the Obama administration is bad for business:

• small companies – Small companies typically are responsible for 70% of new job growth. In this recession, the opposite is true, as small business is one of the segments that have seen some of the largest job loss as small companies are having trouble keeping their doors open. Meanwhile, the Obama administration is doing nothing to help small business through this crisis such as tax cuts, job tax credits, SBA lending, or any of the many other things that might help. Much has been said that one of the problems is that banks won’t lend to them, when in fact, most small companies would not even take the loans if they were available because of other concerns that are making them more conservative with their spending.
• taxes – Businesses of all size are holding their breath, not sure what new taxes are going to be in place over the next 12-24-36 months. With all the government spending, most people feel that taxes have to go up just to balance the increased spending. So businesses are left to consider – do I spend and make investments into my business, or do I hold onto my money in the event I have to pay more taxes. The result – paralysis on increased capital expenditures and investment into their business.
• health care legislation – This issue has at least been delayed with the election of Scott Brown in Massachusetts this week, but there are still a lot of questions on what the final health care bill will look like and what impact will it have on business. Will there be new fees, new taxes and business mandates that impact the bottom line? No one knows at this point and once again, business is very tepid about making investments that might lead to job growth.
• energy policies – And of course there’s the energy policy with Cap and Trade, intrusion by the EPA and continued focus on green energy. While I support long term sustenance of our beautiful planet, it should be obvious that the energy policies under consideration are about more than just being green. The result of these policies once again will lead to higher taxes, more fees and more regulation. Are we noticing a pattern here?
• deficit and debt – Americans are not stupid, they know that the exploding national deficit and rising debt have a price to pay somewhere down the road. And that price possibly will be hyper inflation, higher interest rates, higher taxes and in general, reduced consumer buying power. Two-thirds of the American economy is driven by consumer spending, any concerns about their reduced buying power surely will impact how businesses make their long term strategic business plans.

In general, the theme of the entire first year of the Obama administration was more regulatory control, which is very bad for business. We live in a free market society and until the government decides to just get out of the way, we are going to see limited business growth. We have the US government taking over companies, a pay czar that is regulating pay and multiple pieces of legislation that impose new fees and taxes on the American people and business. There are also discussions on raising taxes, including the capital gains tax which will lead to continued restriction of business investment.

When all this is considered, is there any reason why one should think that this administration is anything but “bad for business”?

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