This time it’s Bernie Marcus, co-founder of Home Depot. Marcus makes a lot of serious (and sadly, all too familiar) observations about today’s economy, but this one is just devastating:
Investors Business Daily: If you could sit down with Obama and talk to him about job creation, what would you say?
Marcus: I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal arena. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face. I would try to explain that the plight of the businessman is very reactive to Washington. As Washington piles on regulations and mandates, the impact is tremendous. I don’t think he’s a bad guy. I just think he has no knowledge of this.
Investors Business Daily: Why don’t more businesses speak out?
Marcus: They are frightened to death — frightened that they will have the IRS or SEC on them. In my 50 years in business, I have never seen executives of major companies who were more intimidated by an administration.
Now we know why all those orders for corporate jets were suddenly canceled last month. There really is a culture of fear among business management. And fear causes business managers to fall back into survival mode rather than move forward in a growth mode.
Speaking of survival mode, check out this devastating observation, published this week by The Heritage Foundation: Economic Recovery Stalled After Obamacare Passed.
In March 2010, Congress passed President Obama’s health care reform legislation. The bill had appeared in serious jeopardy, and after the upset special election victory of Senator Scott Brown (R–MA), many analysts expected the bill to fail. Instead, it became law.
The law discourages employers from hiring in several ways:
- Businesses with fewer than 50 workers have a strong incentive to maintain this size, which allows them to avoid the mandate to provide government-approved health coverage or face a penalty;
- Businesses with more than 50 workers will see their costs for health coverage rise—they must purchase more expensive government-approved insurance or pay a penalty; and
- Employers face considerable uncertainty about what constitutes qualifying health coverage and what it will cost. They also do not know what the health care market or their health care costs will look like in four years. This makes planning for the future difficult.
In May 2010, the job situation stopped improving. Employers created just 48,000 net jobs, and the trend in job creation changed. Starting in that month, private-sector hiring took a new course, improving by only 6,500 jobs per month—less than one-tenth the previous rate … The fact that improvements in the job market ground to a halt after Congress passed Obamacare does not prove that the health care law caused it—correlation cannot prove causation. However, the fact does lend strong weight to the voices of businesses who say that the law is preventing hiring.
When you represent Heritage’s conclusions graphically, the evidence is sobering:
Businesses are simply trying to brace themselves for the massive health care cost increases that will kick in, starting in 2013. Oh, and did I mention that the residential real estate market, which is currently in a double-dip pricing slump, fell again in June, and is on track to post its worst year in over a decade?
Unfortunately, none of this is going to get any better until there is real CHANGE in Washington DC.