Uncertainty is Energy No. 1
By DICK MORRIS
Published on
TheHill.com
on September 6, 2011
All who realize how disastrous Obama's economic policies have been
and what a terrible effect they are having on our economy expected
August's net job-creation numbers to be low. Few thought they would be
nil.
Buried within the data is a micro-statistic symptomatic of what is
happening in all sectors of the economy. In August, the economy lost
30,000 healthcare jobs, a drop from its recent monthly increments of
10,000 to 15,000 and well down from historical norms of 30,000 new
healthcare jobs each month.
Why should healthcare jobs be down? It cannot be due to lax consumer
demand. People are still getting sick and most healthcare is funded by
third-party reimbursement: half from the government and half from
private health insurance companies. Weak personal income, the
unavailability of credit or a lack of confidence in the economy's future
-- the usual suspects when a sector loses jobs -- are not relevant to
this industry. People are still getting sick and needing care, and
government cutbacks in reimbursement have yet really to set in. So why
are jobs down?
It is simply because the industry is traumatized and terrified by the
impact of ObamaCare. No one knows what the reimbursement rates will be
or what restrictions will be imposed on facility construction or
utilization. Nobody can plan ahead. This regulatory nightmare is the
direct result of the ambitious scope of ObamaCare. So no new jobs are
being created, and 30,000 were lost last month.
Healthcare is but a microcosm of what is happening throughout the
economy.
Manufacturing is not hiring because of the threat of EPA regulation.
The energy sector is paralyzed by federal restrictions on drilling,
looming federal regulation of fracking and possible restrictions on the
pipeline for tar sand oil.
The small-business sector can't get credit because community and small
banks are afraid to lend. With the FDIC closing these banks at the rate
of over 200 a year and forcing their merger into larger institutions,
local bankers are fearful of lending to local businesses. Ten percent of
the nation's community banks are on the FDIC watch list waiting for
their turn at the financial guillotine. This is no environment for
encouraging lending.
Businesses of all stripes live in fear of unionization. With 93 percent
of the private sector union-free, the new rules being imposed by the
National Labor Relations Board induce hesitancy and great trepidation
among private employers in all sectors.
And consumers, particularly those in upper brackets, are afraid of
possible federal tax increases once the Bush tax cuts expire in December
2012. With the top 2 percent of earners accounting for one-third of
consumer demand, their insecurity is a significant drag on the economy.
In area after area, the efforts at social reform this administration has
undertaken are blocking recovery from the recession. And at the same
time, the macro policies of the Obama presidency are getting in the way
of micro stimulus programs. He may propose, in Thursday's speech,
incentives to small-business lending, but the Dodd-Frank regulatory
environment will stop businesses from taking advantage of it. He might
offer favorable tax treatment to manufacturers, but fear of the EPA and
the NLRB will force employers to remain on the sidelines.
Particularly worrying is Obama's coming proposal for an infrastructure
bank that would be able to borrow money without congressional approval
to fund allegedly revenue-producing road and bridge construction. Even
though these bonds would not be federally guaranteed legally, they will
live in the in-between netherworld that Fannie Mae pioneered. But with
highway mileage down and gas prices up, toll revenues are not likely to
keep pace with construction activity. So defaults on the debt of the new
agency are likely and, again, as with Fannie Mae and Freddie Mac, the
taxpayers will end up paying off the debt.
In each sector of the economy, Obama's policies are contradicting one
another and vitiating any effort at economic recovery.
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