Friday, January 22, 2010

Obama and the economy

A number of observers on the political right have made the argument that the Obama Administration has effectively thrown sand in the gears of economic recovery through many of its actions, and even proposed actions, by making businesses wary of expansion. Businesses, the thinking goes, are less inclined to ramp up hiring in the face of looming new burdens such as a health care mandate, new taxes and environmental regulations such as cap and trade. It's certainly a position I am sympathetic to.

This excerpt from an article in today's Washington Post would seem to indicate this isn't just idle speculation:
As Obama discusses the nation's economy, he often stresses that expanding health-care coverage and educational opportunities and embracing clean energy are essential to job growth.

But in the short run, some of his policies could cost existing jobs, especially health-care reform, if it is enacted. One of the few large businesses that has prospered in Lorain County in recent years has been Invacare, a maker of home medical devices, such as walkers and wheelchairs.

The company has 1,300 employees in Lorain County but has stopped hiring in anticipation of a tax on medical devices that was proposed to help pay for the president's health-care reform plan.

A. Malachi Mixon III, who led a group of investors who bought the company from Johnson & Johnson in 1979, said the tax would cost his business $15 million a year -- as much as he spends on research and development. If a tax were enacted, he said, he would seriously consider moving jobs to his factories in China and Mexico.

"I'm not making money in my Lorain plant now," said Mixon, who has suspended contributions to the company 401(k), and frozen executive salaries in anticipation of the tax. That, in turn, has left many of his employees nervous.

"This tax will ultimately result in the loss of company revenue/profits, which will in turn, result in the loss of jobs for Invacare and Lorain County," read an e-mail sent to county Democratic Party officials in advance of Obama's visit by Joe Simonetti, who identified himself as a company employee. "I, personally, would rather pay more in taxes than to have Invacare pay the tax, just so I can keep my job."
As I said earlier this week, for the economy to recover government should stay away. The last thing we need is Congress and the White House turning their attention to jobs and the economy -- they've done enough damage already.

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