Morning Jay: The Wet Blanket
6:00 AM, Jul 22, 2011 • By JAY COST
Steve Wynn’s comments about the Obama administration caused quite a stir this week. The Las Vegas tycoon said:
He's not the only high profile business leader blasting the feds. Consider this interview with Home Depot cofounder Bernie Marcus, who says that the U.S. government is the biggest impediment to business growth today.
One big reason for business discontent? Obamacare, which unfortunately duplicated the worst feature of Hillarycare from 1994. In rejecting a single-payer system, Hillarycare put forward a program of “managed competition” that came across like a Rube Goldberg device. Few people could understand it. Similarly, Obamacare shied away from a Canadian-style system of socialized medicine, instead offering heavily regulated health care exchanges, but its design is so clunky that businesses are having a hard time figuring out what is going to happen.
Evidence of this uncertainty can be found all around, and not just in the comments of high-profile leaders like Wynn and Marcus. The Federal Reserve "Beige Book" is an anecdotal collection of business conditions in the Fed's twelve districts. Published eight times a year, the Beige Book has long been noting broad-based unease when it comes to Obamacare.
This is from the Richmond Fed, in June:
This is from the Boston Fed, in January:
This is from the Atlanta Fed, in January:
This is from the Boston Fed, in October:
This is from the Chicago Fed, in October:
This is from the Chicago Fed, last August:
Other anecdotal collections from the regional Federal Reserve banks confirm this widespread apprehension. The Philadelphia Fed’s May 2011 outlook commented:
In October, the Atlanta Fed reported:
A recent Chamber of Commerce survey of small businesses found a large number listing Obamacare, new regulations, and high taxes as big challenges moving forward. In fact, a whopping 75 percent of respondents at least partially agreed with the statement, “the recent healthcare law makes it harder for my business to hire more employees.”
Democrats won't admit it publicly, but many of them surely recognize that all this is a huge problem for their party. When he won the nomination in 2008, Barack Obama took charge of a coalition that, thanks to the efforts of Bill Clinton, had won a measure of credibility with the business community for the economic boom of the 1990s. Clinton’s “New Democrat” approach had given the party a pro-business image, one that stood in stark contrast to, for instance, the “People Versus the Powerful” rhetoric of Walter Mondale in 1984.
Judging by the reactions of business people across the country, Obama has greatly damaged his party’s reputation as a pro-business party. He is easily the least business-friendly president since Harry Truman, the last national leader to pit one group of Americans against another so persistently. That is going to be a big problem for Obama next year, and subsequent Democratic leaders will have to work hard to rebuild the bridges that this president has clearly destroyed with American business.
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