** This is the second of the Obammunism Chronicles, an ad-hoc series that will review and analyze the incipient economic shocks and surprises on the road to "change." **
If you haven't been hiding in a cave in Afghanistan today you have most likely heard about the latest series of punches to land on our national economic face. The first bit of news was that the latest jobs report issued today indicates that more than half a million Americans lost their jobs this past month. To believe the news one would think that this was entirely unexpected. If you know much about how small businesses in America work, and how our Democrat-controlled congress has treated them over the past two years, however, it was pretty self-evident that this was coming.
One has only to put oneself in the place of a small business owner or entrepreneur to see how this all went down. It's a story being told hundreds of thousands of times tonight:
- My business was growing really fast for several years in a good economy.
- I hired new people to help with the added business.
- Democrats took over congress two years ago, talking about "fairness" and the environment.
- Dems spent two years threatening businesses with socialist ideas.
- Business slowed down the last year or so.
- I started losing money on my newer employees as business slowed.
- The guys who talk like they are out to get me win the Presidency, the Senate, and the House on Nov 4.
- After waiting for relief from the government, I was told that they have a plan to heal our economy.
- That plan is to charge me a lot more taxes and to start to penalize growth and success even more.
- Sensing the diminishing return of further success I decide I have to scale to scale things back.
- I spend November laying people off.
The entrepreneur in America doesn't want to lose employees. In a good business plan every position adds something to the bottom line. Every position is profitable. That is why the jobs report is a forward-looking indicator. If each of those 500,000 workers produces just $20,000 in value each year, we are looking at a hit of more than $10 BILLION in loss to our GDP. Why would American businesses be willing to take a hit like that? This jobs report reflects a massive move away from growth by American businesses. If this is a trend we will indeed see some bumpy roads ahead.
What is Obama's best plan to get these people back to work and America growing again? No one really knows for sure, but from what we can make out of it, it includes extending unemployment insurance. Raising taxes. Penalizing success and growth. Above all, giving the "important" ones "(your friends) money. Lots of it. Seriously.
I am no Steve Forbes, but from what I can see what we are calling American capitalism isn't exactly that any more. What is creeping into our national economic policy isn't exactly socialism, and it certainly isn't capitalism, not exactly fascist, or communist. Rather what I am seeing is an ugly mishmosh of the worst of all of these. The overburdening control by government of socialism and communism. The oligarchic moneyed interests of fascism, and all the risk and uncertainty of capitalism.
This is not the end of the Bush legacy, but rather the beginning of the Obama economy. American business is speaking. Is anyone listening?
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