“Suppose the presidential election were held today. If Barack Obama were the Democratic Party’s candidate and Mitt Romney were the Republican Party’s candidate, who would you vote for Barack Obama, the Democrat or Mitt Romney, the Republican?” Gallup asked this question last week to 2,200 registered voters and 46% of the respondents chose Romney to 45% that chose Obama. It’s an ominous warning to Obama since the results include the leanings of those who are currently undecided.
This wasn’t the only bad news Obama received last week. America saw 115,000 net jobs in April, but 350,000 Americans gave up looking for work. That means 235,000 more Americans now have no job and no unemployment benefits. Since these folks are no longer calculated in the unemployment figures, it pushes the unemployment rate down a fraction of a point to 8.1%.
How did Obama spin this bad news? He told a crowd of teenagers at Washington-Lee High School in Arlington, Va. “The unemployment rate ticked down again. So after the worst economic crisis since the Great Depression, our businesses have now created more than 4.2 million new jobs over the last 26 months—more than 1 million jobs in the last six months alone. So that’s the good news.”
Really? Do you think we’re that stupid, Mr. President?
Look, it’s really simple. Reduce the size and scope of government, end onerous regulations, cut taxes and cut spending even more. Let the free market work. If the federal and state governments do this, the engine of American ingenuity will be unleashed. Corporations and small businesses will hire more people and for many others, they will go from unemployed to self-employed. It’s a fact and history backs the data.
President Kennedy lowered tax rates across the board and both employment and revenues went up. When President Reagan cut taxes, unemployment dropped from 10% to 6% and revenues went up. In 1984, Ireland went to a flat rate of 15% versus 35% and they grew their economy four times faster and their GDP remained strong for the next 22 years.
But the economic policies of Democrats at all levels, epitomized by Barack Obama, do not lend themselves to this type of result. In fact, they are pro-government, pro-union, pro-regulations, pro-higher taxes and markedly anti-business. Sure, Obama will spin it and suggest that during his presidency the size of government at all levels has reduced by 2%, but that doesn’t say much when the pace of the entire economy has slowed and there one million more Americans unemployed during that same period. The fact is that government jobs have outpaced the private sector.
If Obama’s “forward” charge actually adopted some small government policies that didn’t rely on takeovers, handouts, and bailouts – and if they actually reduced burdensome regulations, cut taxes and spending even more – then this economy would instantly begin to boom.
To illustrate this point, I’m sharing some data that I recently came in contact with that shines a new light on the United States’ business regulatory climate and the nation’s economic health. This is exclusive information since it is not due to be released until tomorrow. It is a survey of over 6,000 small business owners that rank the government’s friendliness toward business. This is important because Small businesses accounted for 65% of net new jobs created between 1993 and 2009 and employ nearly half of all private sector employees. It was conducted over a two-month period by Thumbtack.com in partnership with the Ewing Marion Kauffman Foundation.
Thumbtack.com is an internet marketplace that allows local service providers and consumers to find each other and negotiate jobs online and the Ewing Marion Kauffman Foundation is a non-profit foundation that states its vision is to foster “a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities.”
The information in their survey goes beyond unemployment levels and tax rates, it shows how small business, the engine that drives the economy, truly feels about government and the economy through nuances that are difficult or impossible to measure through other data sources.
Notable information reveals that while taxes are burdensome to the overall health of a business, the licensing regime is a greater headache by a factor of nearly two. Likewise, being subject to special regulatory requirements had a negative effect on overall small business and complying with these arduous regulations was by far the most important factor.
The data backs up my assertions. Republican states that tend to ease taxes and regulations tend to be considered more “business friendly.” In the Thumbtack.com survey, it ranked Idaho and Texas as the most business-friendly states, with Oklahoma City and Dallas-Ft. Worth taking top honors among cities across the nation. Since 1980, Idaho, Oklahoma and Texas have all solidly voted for Republicans in each Presidential race. These three states have a combined unemployment rate of 6.8%.
By contrast, Vermont and Rhode Island found themselves on the opposite end of the spectrum with higher taxes and greater regulations and are joined in the bottom-five by New York and California. Since 1992, Vermont, Rhode Island, New York and California have all solidly voted for Democrats in each Presidential race. These four states have a combined unemployment rate of 8.9%.
Perhaps if Obama spent less time trying to spin the fact that more Americans are unemployed to impressionable high school students, and more time actually working with Republicans in the House like Representative Paul Ryan to reduce spending, taxes and regulations… then perhaps we could get this 8.1% unemployment number down to around 6.0% and he could run for re-election on an actual real record.
In the meantime, expect Romney, who said today that Obama is the worst President for small business since Carter, to continue to be competitive as we get closer to election day. America is sick and tired of the failed promises, the fiscal irresponsibility, the spin and the demagoguery of Obama and the Democrats at all levels of government… we don’t want to move forward with the same old tired big government policies, we want real hope and change, we want a smaller more responsible government.